Citi has upgraded Billabong (BBG) to Buy from Neutral after a consortium consisting of Californian private equity firm Altamont Capital Partners and Blackstone Group's credit arm GSO Capital Partners, provided a bridge loan of US$294mm which will enable the company to repay debt. We have never had concerned with Billabong's brand potential, but have been concerned about solvency. We believe that risk is now greatly diminished, Citi analyst Craig Woolford noted. Target price has been raised from 25c to 33c (current price 25c) with a price -to-earnings-ratio of 12.50.
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