Shares in Billabong nearly halved in trading today (25 June) as the market reacted to another profit warning on Friday and news that the surfwear retailer intends to raise AU$225m (US$228m) by selling new shares at a discounted price.

Shares fell 47% to close at AUD0.96 on the Australian Securities Exchange.

Last week, the firm said the proceeds of the share offer will be used to pay off debt and reduce overall leverage. It also cut its full-year earnings forecast to a range of $130-135m, down from earlier guidance of $157m.

In February, Billabong rejected an offer from private equity firm TPG Capital which valued the company at around AUD841.8m, or $3.30 after major shareholder and founder Gordon Merchant said he would not support a bid that valued the company at less than AUD4.00 a share.