BILLABONG is facing a challenge to its recapitalisation deal with private equity firm Altamont from two US hedge funds seeking to strike their own deal with the troubled surfwear retailer. Billabong's deal with Altamont will allow it to pay its debt and provides long-term financing for the company. But Centerbridge Partners and Oaktree Capital, who have since lodged their own refinancing proposal with Billabong, have made an application to the Takeovers Panel seeking to delay the retailer's deal with Altamont. They claim parts of the deal are anti-competitive and coercive. Billabong says it disagrees with the basis of Altamont's application and will respond to it within the takeover panel's normal procedures. The Takeovers Panel says no decision has yet been made on whether to conduct proceedings on the matter.