Troubled Billabong International lost nearly half its value with shares diving this morning after the surfwear retailer on Friday flagged a big discounted capital raising to avoid collapse.
At 9.10am, its shares were 88 cents, or 48 per cent, lower at 95 cents following last week's earnings downgrade and the launch of a $225 million capital raising.
This morning, Billabong said it had completed the institutional component of its accelerated pro-rata renounceable entitlement offer and had raised about $155 million, or 79 per cent of the new shares available.
Billabong launched the capital raising just months after knocking back a $3.30-a-share takeover offer.
Billabong expects underlying earnings, which exclude one-off costs from the restructure, to be $130 million to $135 million for the year to June 30.
That's down from its forecast of earnings slightly above $157 million when it announced plans for a major restructure in February.
Billabong also launched a $225 million capital raising to help reduce its $325 million debt pile.
Eligible shareholders were able to buy six new ordinary shares for every seven existing Billabong shares at a price of $1.02 per share.
The retail component of the offer will take place from Friday under the same terms.
Billabong chief executive Laura Inman said founder and director Gordon Merchant would invest $30 million in the capital raising.
It comes as chairman Ted Kunkel announced he will step down after the company's October Annual General Meeting following last month's departure by chief executive Derek O'Neill.
More to come