Billabong shares are expected to fall to record lows, following an announcement it will hit up investors for a $225 million cash injection and sell shares in a rights issue at a discount of more than 40 per cent.
Founder and director Gordon Merchant will invest $30 million as part of the latest capital raising, launched in a bid to reduce the group's $325 million debt burden.
The iconic surfwear group has continued to struggle in tough economic waters, also announcing a profit downgrade and the departure of chairman Ted Kinkel in October.
Billabong revealed deteriorating trade conditions in Europe, Australia and Canada amid poor consumer confidence and concerns over the global economy.
The group now expects underlying earnings to be down from an expected $157 million to between $130 million and $135 million for the year to June 30.
This does not include one-off costs from a major restructure the group announced in February.
Freshly appointed chief executive Launa Inman said the size of the share offer was vital in restoring the group's balance sheet and restructure.
Billabong: Gloomy forecast ahead.
