* Enters into 5 yr loan agreement with Rhone

* To use proceeds to pay down debt

* Q2 adj. EPS $0.05 lags est $0.06

* Gross margins fall in Q2 hurt by inventory reduction

* Shares fall 18 percent

(Adds conference call details)

June 8 (Reuters) - Apparel maker Quiksilver Inc (ZQK.N: Quote, Profile, Research) said it agreed with private equity firm Rhone to take a 5-year loan of about $150 million to improve its liquidity position, and posted an adjusted quarterly profit that lagged market estimates by a cent, hurt by lower gross margins.

Quiksilver said it will eliminate 160 positions at the end of July as part of the final phase of a T-shirt production facility closure and distribution center consolidation, a company executive said on a conference call with analysts.

The company said it was targeting substantial cost reductions by the end of this fiscal year and expects earnings to be in the low-single-digit range in the third quarter. It sees third-quarter revenue falling in the mid-teens on a percentage basis compared with the year-ago quarter.