After Billabong announced last week it entered into a $320 million agreement with Altamont Consortium that would help it immediately repay its existing debts, the surfwear retailer’s two main creditors lodged an application with the federal government’s Takeovers Panel challenging the refinancing deal.

Oaktree Capital Management and Centrebridge Partners have noted in their application that until shareholders approve the deal, a 35 per cent interest rate levy will be charged on a convertible loan. If and when shareholders’ approval is obtained, the interest rate decreases to 12 per cent per annum.

According to the Takeovers Panel, the application also pointed out that the convertible note increased coupon and termination fee amount to lock-up devices that are anti-competitive and coercive.

Despite this, at the current stage a sitting panel has not been appointed and no decision has been made whether to conduct proceedings.

“The company disagrees with the basis for the application and will respond to it in accordance with Panel’s procedures,” Billabong said in a statement.