Long-suffering Billabong shareholders have been asked to provide $225 million after the troubled surfwear company issued another profit warning amid dire retail conditions.
And hot on the heels of last month's departure by chief executive Derek O'Neill, chairman Ted Kunkel will step down in October.
Billabong on Wednesday said it had experienced a further deterioration in trade in Europe, Australia and Canada over the past six weeks as consumer confidence plunged amid sovereign debt worries.
The retailer now 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.
On top of the restructure, Billabong will launch a $225 million capital raising to help reduce its $325 million debt pile.
While the shares on offer will be priced at a hefty discount, founder and director Gordon Merchant will still invest $30 million.
Chief executive Laura Inman, who has been in the top job for just six weeks, said another retail downturn had been factored in to the size of the share offer.
"Today's capital raising is a vital step forward for Billabong," Ms Inman said in a statement.
"It not only further strengthens the balance sheet, but also assists in continuing to execute on previously announced initiatives and to execute on the transformation strategy."
However, analysts are unconvinced about the overall value of the fundraising for shareholders.
Billabong will issue new shares to existing shareholders at a 44 per cent discount to current prices.
It has also extended its loans to ensure repayments are not due until least July 2014.
City Index analyst Peter Esho said the capital raising was a huge slap in the face to shareholders, particularly after Billabong rejected a generous offer from private equity giant TPG Capital four months ago.
"Knocking back private equity's $3.30-a-share takeover offer and then raising equity at $1.02 will no doubt see a lot of criticism from shareholders and rightly so," he said.
Shareholders would have to participate or have their shares massively diluted.
JP Morgan analyst Shaun Cousins said Ms Inman was asking investors to take a leap of faith.
Ms Inman said she would wait until Billabong reports its full year earnings results on August 24 to announce detailed financial plans to rebuild the company over 36 months.
"I'm committed to taking a hard-headed approach," she told analysts.
"There are no sacred cows as we look for ways to improve the business."
After Ms Inman's plans are revealed, Mr Kunkel will retire along with the chair of the board audit committee Allan McDonald.
They will leave after Billabong's annual shareholder meeting in October.
A search has begun for at least two new board members.
In the meantime, a new head of retail will start in July.
Billabong's shares went into a trading halt before Thursday's announcement. They closed at $1.83 on Wednesday.