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8-K - FORM 8-K - QUIKSILVER INC | a56517e8vk.htm |
EX-10.1 - EX-10.1 - QUIKSILVER INC | a56517exv10w1.htm |
Exhibit 99.1
Company Contact: | Bruce Thomas Vice President, Investor Relations Quiksilver, Inc. (714) 889-2200 |
Quiksilver Announces Debt-for-Equity Exchange with Rhône
| Rhône provides de-leveraging option subject to stockholder approval | ||
| Exchange offer potentially reduces debt by $140 million | ||
| Debt-for-equity exchange accretive to earnings |
Huntington Beach, California, June 15, 2010 Quiksilver, Inc. (NYSE:ZQK) today announced that it
has entered into an agreement with Rhône to exchange $75 million of the outstanding principal
amount of Quiksilvers senior secured term loans for an aggregate of approximately 16.7 million
shares of its common stock at an exchange price of $4.50 per share. The closing share price of the
companys common stock on the New York Stock Exchange on June 14, 2010 was $4.47. In addition,
under the agreement, Quiksilver has an option, exercisable in its sole discretion, to require Rhône
to exchange up to an additional approximately $65 million of the remaining outstanding principal
amount of senior secured term loans for additional shares of common stock at the same price per
share. This option is available for a 60-day period following execution of definitive
documentation relating to the transaction. As of April 30, 2010, the outstanding principal balance
of the senior secured term loans was approximately $159.4 million. Quiksilver intends to pursue
alternative equity or equity-related financing during the option period, proceeds of which would be
used to repay the senior secured term loans.
The proposed transaction, which would be accretive to the companys earnings, was approved by
Quiksilvers independent directors. In announcing the agreement, Robert B. McKnight, Jr., Chairman
of the Board, Chief Executive Officer and President of Quiksilver, Inc., commented, This exchange
offer is an important step toward further de-leveraging our balance sheet and will provide us with
additional operating flexibility in an improving business environment. Additionally, the Rhône
offer demonstrates a real vote of confidence by a major investor who is willing to commit to a
further equity investment amid a volatile stock market. We believe that stockholders will
recognize the substantial value of this endorsement.
Rhône currently owns warrants to acquire approximately 16.2% of the outstanding shares of
Quiksilvers common stock on an as-exercised basis, based on the number of outstanding shares as of
June 4, 2010. Upon consummation of the initial $75 million debt-for-equity exchange, Rhône would
own approximately 24.2% of the companys outstanding shares including the shares issuable upon
exercise of the warrants. If Quiksilver exercises the option in full, Rhône would own
approximately 30.0% of the companys outstanding shares, including the shares issuable upon exercise
of the warrants.
In connection with the debt-for-equity exchange transactions, Quiksilver and Rhône would enter into
a stockholders agreement, pursuant to which, among other things, Rhône would be subject to certain
transfer and standstill restrictions and would be entitled to certain customary information rights,
participation rights and registration rights. Rhônes two designated directors will continue to
serve on Quiksilvers board of directors. If, following the exercise of the option, $30 million or
less in aggregate principal amount remains outstanding under the senior secured term loans, under
the agreement, Rhône has agreed to modify the minimum EBITDA financial covenant contained in the
senior secured term loans.
The issuance of the common stock to Rhône in the debt-for-equity exchanges is subject to
stockholder approval. The exchange transactions, if approved by stockholders and exercised by
Quiksilver Announces Debt-for-Equity Exchange with Rhône
June 15, 2010
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June 15, 2010
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the
company, are subject to other customary closing conditions, including clearance under the
Hart-Scott-Rodino Antitrust Improvements Act, and would be expected to close during the fiscal year
ending October 31, 2010.
IMPORTANT INFORMATION:
Quiksilver intends to file a proxy statement with the Securities and Exchange Commission (the
SEC) in connection with the exchanges discussed above. Stockholders should read the proxy
statement and other relevant documents when they become available because they will contain
important information about the exchanges. The proxy statement, any amendments or supplements to
the proxy statement, and other relevant documents filed by Quiksilver with the SEC will be
available for free at www.sec.gov and at Quiksilvers website, www.quiksilverinc.com, or by writing
to: Quiksilver, Inc., 15202 Graham Street, Huntington Beach, California 92649, Attn: Chief
Financial Officer. Quiksilver and its executive officers, directors and other members of
management may be deemed participants in the solicitation of proxies from Quiksilvers stockholders
with respect to the exchanges. Information regarding Quiksilvers participants in the solicitation
appears in Quiksilvers definitive proxy statement for its 2010 annual meeting, which was filed
with the SEC on February 12, 2010. Additional information regarding their interests, equity and
otherwise, will be included in the proxy statement to be filed in connection with the exchanges.
About Quiksilver:
Quiksilver, Inc. (NYSE:ZQK) is the worlds leading outdoor sports lifestyle company, which designs,
produces and distributes a diversified mix of branded apparel, footwear, accessories, snowboards
and related products. The Companys apparel and footwear brands represent a casual lifestyle for
young-minded people that connect with its boardriding culture and heritage.
The reputation of Quiksilvers brands is based on outdoor action sports. The Companys Quiksilver,
Roxy, DC, Lib Tech and Hawk brands are synonymous with the heritage and culture of surfing,
skateboarding and snowboarding.
The Companys products are sold in over 90 countries in a wide range of distribution, including
surf shops, skate shops, snow shops, its proprietary Boardriders Club shops and other company-owned
retail stores, other specialty stores and select department stores. Quiksilvers corporate and
Americas headquarters are in Huntington Beach, California, while its European headquarters are in
St. Jean de Luz, France, and its Asia/Pacific headquarters are in Torquay, Australia.
About Rhône:
Rhône was founded in 1996 and has offices in New York, London and Paris. Rhône focuses on
middle-market private equity investments in businesses with pan-European or trans-Atlantic presence
or growth prospects. Rhônes investment philosophy includes the development of strong, strategic
partnerships with the management of portfolio companies in which it is investing. Rhône currently
has investments in a diversified portfolio of companies.
Forward looking statements:
This press release contains forward-looking statements including but not limited to statements
regarding the Companys financing activities and other future activities. These forward-looking
statements are subject to risks and uncertainties, and actual results may differ materially.
Certain factors that may affect actual results to differ materially include, without limitation,
our
Quiksilver Announces Debt-for-Equity Exchange with Rhône
June 15, 2010
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June 15, 2010
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ability to finalize the definitive documentation with respect to the exchanges described above;
our
ability to obtain stockholder approval of the exchanges described above or the failure to satisfy
other conditions to complete the exchanges, and a delay in completing any of the transactions
described above. Please refer to Quiksilvers SEC filings for more information on the other
factors that could cause actual results to differ materially from expectations, specifically the
sections titled Risk Factors and Forward-Looking Statements in Quiksilvers Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q.
* * * * *
NOTE: For further information about Quiksilver,
Inc., you are invited to take a look at our world at www.quiksilver.com, www.roxy.com, www.dcshoes.com,
www.lib-tech.com and www.hawkclothing.com.
www.lib-tech.com and www.hawkclothing.com.