Boardsports brand Quiksilver has agreed to sign a debt-to-equity exchange with private equity firm Rhone to swap $75m (£50.8m) of its outstanding debts for about 16.7 million shares at $4.50 (£3.04) per share.
Under the terms of the deal, Quiksilver has an option, for 60 days following the signing of an agreement, to request a further exchange of $65m (£44m) of the remaining outstanding loans for additional shares, according to reports.
The deal is set to reduce Quiksilver’s debt by $140m (£94.7m). Quiksilver said it will seek alternative financing during the 60-day option period.
It is understood that the initial $75m (£50.8m) debt-for-equity exchange would give Rhone 24.2% of Quiksilver’s outstanding shares. If Quiksilver exercises the options in full, Rhone would own 30% of the company.
In June last year, Quiksilver secured a five-year loan of $150m (£92.8m at the time) from Rhone to pay down debts as profits fell at the boardsports business.