Quiksilver enters debt-for-equity exchange
Quiksilver (NYSE: ZQK) said it reached an agreement with private equity firm Rhone that would let Quiksilver give Rhone 16.7 million shares in exchange for $75 million in debt.
The stock would be priced at $4.50 per share. The deal includes an option to require Rhone to swap another $65 million in debt for more stock.
The deal is contingent on approval by Quiksilver shareholders and by regulators. Rhone owns warrants to acquire about 16.2 percent of Quiksilver shares, and could own as much as 30 percent of the company if it exchanges all $140 million in debt.
On the news, Moody’s Investors Service said it might raise its ratings on the credit of Quiksilver. Moody’s currently has a ‘B3’ corporate family rating on the company, which is non-investment grade or “junk” status. It also said the company’s performance has improved.
Moody’s said its ratings apply to $400 million in debt held by Quiksilver.
–Compiled by Wendy Geister
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