Coastal Capital, a hedge fund based in the US, on Monday joined other debt specialists in surrounding Billabong International Ltd, looking for a board spill. On the other hand, rival investors were eyeing the proceeds from a potential debt restructure over equity from a long-term turnaround.

Coastal, also a Billabong shareholder, expressed its intention to replace the majority of the board and proposed amending the surfwear retailer's constitution on member approval of future debt and equity financing arrangements.

Coastal's news brought Billabong's shares to a 14% increase at AUD0.48 or USD0.43. The stock was a huge improvement from a record low of AUD0.12 in June. However, the stock price share was a far cry from the AUD14 achieved during the company's prime in 2007.

Billabong was devastated by a global expansion in the middle of the global economic downturn. It also experienced a loss of favor with young shoppers, which led to an annual net loss of AUD859.5 million in the last financial year.

The Australian surfwear retailer had opened its books to several private equity investors in the past but no deals were struck. Last month, the company entered into a USD470 million refinancing arrangement with private equity firms Altamont Capital Partners and Blackstone Group Inc.