Embattled surfwear retailer Billabong has been forced to accept new loan terms from its lenders following significant losses for the 2013 half year.
The company, which has been the subject of several buyout bids in the past year, posted a net loss of $536.6 million for the six months ended December 31, 2012.
Revenue overall was also down, 8.1 per cent to $699.6 million for the 2013 half year, from $761.6 million in the previous corresponding period.
As a result, Billabong has been forced has been forced to reconsider its agreements with its major financiers, and the company has confirmed that it has agreed to move to a secured banking agreement “as soon as practicable”.
The new deal will see Billabong grant security over the majority of the group's assets, which reportedly generate around 85 per cent of its earnings.
The group has now also slashed its future guidance for the full year, from $85 million to $92 million, to $74 million to $85 million, following recent results.
Commenting on the group's position, CEO Launa Inman said the group had continued to face difficult trading conditions in Europe and the performance of Nixon has not met expectations.
However, she said the group's Transformation Strategy, outlined in August last year, has helped the company cut costs.
“We have continued to address issues of the past and are seeing some positive signs emerging in several markets and witnessing early benefits of the transformation strategy. These results emphasise that significant structural change is essential to return the group to profitable growth.
“Our focus remains on simplification of the business, reducing costs and continuing to build a culture of transparency and accountability providing a platform for future growth for our brands,” she said.
However, the group's best shot could come in the form of a consortium comprising Altamont Capital Partners and VF Corporation, which first expressed interest in purchasing the Billabong group in January this year.
However, Inman revealed that the Sycamore consortium, which was also granted the opportunity to conduct non-exclusive due diligence in December last year, is still in the running.
She said both companies are expected to conclude their due-diligence processes next month.