SYDNEY, Australia - U.S. hedge fund Coastal Capital joined debt specialists circling Billabong International Ltd on Monday, seeking a board spill, as rival investors eye the proceeds from a potential debt restructure rather than equity from a long-term turnaround.

It's a change from a lonely couple of years for the Australian surfwear retailer, during which it opened its books to several private equity investors only to have them walk away.

"Private equity firms are looking at ways they can exploit the vulnerability without risking too much skin," said City Index analyst Peter Esho. "It's moved from a survival valuation to a play for debt."

Billabong's shares jumped 14 percent to A$0.48 ($0.43) after shareholder Coastal said it wanted to ditch and replace the majority of the board as well amend the company's constitution for member approval of future debt and equity financing arrangements.

The stock has improved from a record low of A$0.12 in June but remains a far cry from the A$14 reached in the company's heyday in 2007.

Still, analysts say an equity valuation of around A$0.40 to A$0.60 is fair for a company that recently wrote down the value of its namesake brand to zero.

Billabong was crippled by an ill-timed global expansion amid the global economic downturn and the loss of favour with young shoppers for its brands, leading to an annual net loss of A$859.5 million last financial year.

The company last month entered into a $470 million refinancing arrangement with private equity firms Altamont Capital Partners and Blackstone Group Inc.

But it later said it would consider a rival offer from U.S. hedge funds Oaktree Capital Management and Centerbridge Partners, which offered a number of sweeteners, including a lower interest rate.

IG market analyst Evan Lucas said there was speculation Centerbridge and Oaktree were behind some of the recent rally in Billabong shares.

"The price is actually quite strong, suggestions are that it could actually be the two corporate players and they're trying to pick up equity shares to then use as debt talk as well," Lucas said.

PROPOSED BOARD SPILL

New York-based Coastal, which picked up a 5 percent stake in Billabong last month, has a history of gatecrashing debt-for-equity deals in Australia, attempting to derail a $2 billion deal by TPG Capital for Alinta Energy in 2011.

Coastal wants to remove all Billabong's current directors except founder and majority shareholder Gordon Merchant and fellow board veteran Colette Paull.

Billabong said it is reviewing the request from Coastal to call a shareholder meeting to vote on its proposals. The Gold Coast-based company added however that Coastal's intervention would not derail a refinancing deal.

Altamont, which plans to make former Oakley boss Scott Olivet CEO to replace Launa Inman, said in a statement on Thursday it was committed to working with the current board "to reinvigorate Billabong's businesses and brands."

Coastal, Centerbridge and Oaktree could not immediately be reached for comment.