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Alternative Market Briefing

Hedge funds Oaktree and Brigade vie for Quiksilver control

Tuesday, October 13, 2015

Komfie Manalo, Opalesque Asia:

Hedge funds Oaktree Capital Management and Brigade Capital Management are engaged in a bidding war to gain control of bankrupt surfwear retailer Quiksilver, reported Business Spectator. But lawyers for Quiksilver’s creditors told the U.S. Bankruptcy Court in Wilmington, Delaware that Brigade Capital has submitted a superior offer of $115 million to fund the company’s restructuring plans.

The lawyers said Brigade’s offer is also "cheaper, longer in duration and provides the debtors with greater flexibility," which they say, are better than the offer made by Oaktree "with respect to virtually every substantive economic and non-economic term."

Quiksilver filed for bankruptcy in August and asked for chapter 11 restructuring involving a $279m debt-for-equity swap with Howard Marks's Oaktree Capital. Under the restructuring deal, Oaktree and Bank of America will provide $175 million in bankruptcy financing, but only $115 million in new money via a secured term facility. The other $60 million comes in secured asset-based revolving credit facility. The deal allows Quiksilver remains open for business during the chapter 11 restructuring.

The deal also spells out a hefty $20m breakup fee to Oaktree if Quiksilver fails to deliver the swap in bankruptcy. Quiksilver owns more than $200 mil......................

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