Coty Inc. has announced that the company expects to receive a shareholder distribution of $250 million at a minimum from its equity stake in Wella. The distribution is an increase from the expected $175 million due to Wella finalizing the intended use of proceeds from its recent refinancing.
Coty intends to use the distribution and other excess cash to redeem its 2023 550 million euros of unsecured bonds in full, reduce debt and contribute to its deleveraging trajectory.
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Sue Y. Nabi, Coty’s chief executive officer, said, “Deleveraging our balance sheet remains a key priority at Coty and a driver of further value expansion. Following our strong deleveraging progress during 2Q22, the expected upsized shareholder distribution from Wella should be a meaningful step in the further reduction of debt.”
Nabi continued, “While we continue to monitor global market conditions, I am very encouraged by our LFL revenue trends quarter-to-date. We remain confident in our guidance for mid-teens LFL sales growth in 3Q22, assuming no significant deterioration in the demand backdrop. This is further evidence that our decision to step-up marketing reinvestment in 2Q22 is having the intended effect of accelerating our sales growth and is an additional proof point of the virtuous cycle we have created.”
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