Dump the board, activist investor tells Billabong New York-based hedge fund Coastal Capital wants all directors removed from Billabong other than founder Gordon Merchant. Picture: Mike Keating Source: HeraldSun BILLABONG shares have surged amid speculation the group could yet secure a more generous rescue deal after a key investor called for a boardroom spill. New York-based hedge fund Coastal Capital, which bought a 5 per cent stake in the company last month, has called for the spill. It wants all directors removed other than founder Gordon Merchant and fellow long-term shareholder and director Colette Paull, who together own almost 16 per cent of Billabong. The hedge fund also wants its own representatives on Billabong's seven-member board. Shares in the embattled surfwear group surged more than 20 per cent during trading today, amid speculation Coastal might support a more lucrative refinancing deal. The slipped later in trading but still closed 14 per cent higher for the day at 48.5c. In a notice to the company, Coastal Capital demanded a shareholder meeting to vote on a number of issues around Billabong's refinancing plans. Billabong said today it was obliged to grant the request for a meeting, but insisted the demands would not derail its ongoing debt rescue negotiations. The group is in the final stages of negotiating a $325 million deal with US private equity firm Altamont Capital Partners. It is also considering a subsequent counter offer from rival consortium made up of US hedge funds Centerbridge and Oaktree. According to speculation sweeping the market yesterday, Coastal tentatively supports Centerbridge and Oaktree. It is expected a deal with Altamont of Centerbridge and Oaktree will be struck before any meeting can be held. The surfwear group would likely combine any extraordinary shareholder meeting with its annual meeting, due in the coming months. Billabong spokesman Chris Fogarty said the group was carefully considering refinancing proposals from both consortiums. "There is no reason at all to delay that process, nor is there any reason to delay getting on with the critical task of rebuilding Billabong," Mr Fogarty said. Coastal Capital has a reputation for corporate shake-ups after it attempted to derail Alinta Energy's $2 billion debt-for-equity deal in 2011. Billabong, which has seen its value eroded over the past 18 months by a series of failed takeover bids, announced last week that its net loss for the year to June had blown out to $860 million.