Oct 31 (Reuters) - Sports-apparel maker Quiksilver Inc ZQK.N will receive only 40 percent of the originally agreed price for its Rossignol business, given the current turmoil in credit markets, but got an extension on a credit line that was due to mature on Friday.
Under terms of the amendment to the 70 million euros credit facility, Quiksilver will reimburse its European bank group 15 million euros on Friday, and the remaining 55 million euros will be extended until March 14, 2009.
The company, which has been reviewing options to secure additional funding, is expanding the review to include private equity investment capital and hired Morgan Stanley to assist it in the process.
Shares of Quicksilver, which were at a 52-week high of $13.69 a year earlier, were trading up 20 cents at $2.71 Friday morning on the New York Stock Exchange.
In August, Quiksilver agreed to sell its underperforming Rossignol ski business to Chartreuse & Mont Blanc, a group led by Rossignol’s former CEO, for 100 million euros.
The move was a relief to Quiksilver investors, who have complained since the company bought the unit in 2005 for $560.8 million that the ski equipment business was a drag on profits and did not fit well with Quiksilver’s main strength in apparel.
The Huntington Beach, California-based company will now receive only 40 million euros for Rossignol.
“In this time of unprecedented challenge in the global credit markets, price concessions were required to achieve a final sale of Rossignol,” Chief Executive Robert McKnight said in a statement. (Reporting by A.Ananthalakshmi in Bangalore; Editing by Pratish Narayanan)