Revlon has announced it has filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York. Revlon’s management team will continue to run the business following the filing.
The Chapter 11 filing will allow Revlon to strategically reorganize its legacy capital structure and improve its long-term outlook, especially amid liquidity constraints brought on by continued global challenges, including supply chain disruption and rising inflation, as well as obligations to its lenders.
Upon receipt of court approval, the Company expects to receive $575 million in debtor-in-possession (“DIP”) financing from its existing lender base, which in addition to its existing working capital facility, will provide liquidity to support day-to-day operations.
Debra Perelman, Revlon's president and CEO, said, "Today’s filing will allow Revlon to offer our consumers the iconic products we have delivered for decades, while providing a clearer path for our future growth. Consumer demand for our products remains strong—people love our brands, and we continue to have a healthy market position. But our challenging capital structure has limited our ability to navigate macro-economic issues in order to meet this demand. By addressing these complex legacy debt constraints, we expect to be able to simplify our capital structure and significantly reduce our debt, enabling us to unlock the full potential of our globally recognized brands. We are committed to ensuring the reorganization is as seamless as possible for our key stakeholders, including our employees, customers and vendors, and we appreciate their support during this process.”
Revlon shares have recently dropped 53%.
The cosmetics brand is struggling to pay off more than $3 billion in debit, half of which is due by 2024, according to Seeking Alpha.
Revlon has reportedly been in talks with lenders to extend the maturity date on about $1.7 billion in debt that is due by September 2023.
In May, the company reported Q1 2022 results that showed net sales were $479.6 million, compared to $445.0 million during the previous year, representing an increase of 7.8%.