Revlon set to exit bankruptcy with 2.7 billion dollar debt reduction

Makeup firm Revlon has reached an agreement with a US judge that could see it exit from bankruptcy later this month.

The company initially filed for Chapter 11 protection in a US bankruptcy court on June 15, 2022, allowing it to strategically reorganise its legacy capital structure with the goal of improving its long-term outlook.

The filing, which also included Revlon’s Canadian and UK subsidiaries, came amid liquidity constraints caused by supply chain disruptions, rising inflation and obligations to its lenders, among other global challenges.

On March 31, 2023, the company submitted the now approved plan of reorganisation to the court, which will see the majority of the company’s equity be owned by former lenders.

Additionally, under the new plan, Revlon will no longer be listed on any stock exchange, making it a private company.

As a result of the restructuring process, Revlon said it is expecting to emerge with approximately 285 million dollars of liquidity, which will be funded through an equity rights offering, a new money senior secured credit facility and new asset based loans.

While the plan will eliminate the majority of balance sheet debt, it will be left with around 1.5 billion dollars in outstanding debt.

In a regulatory filing, Debra Perelman, Revlon’s president and CEO, said: “The plan confirmation is a critical milestone, and positions Revlon to emerge from the restructuring process with a greatly simplified capital structure that will support the business going forward.

“We know this financial restructuring has been challenging for our employees, vendors and partners, and we thank them all for their support.

“Our new capital structure and increased liquidity will enable us to continue to animate our brands in the market and we look forward to the future of Revlon.”