Revlon to Exit Bankruptcy Later This Month
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Revlon is set to emerge from bankruptcy later this month as a private company and without Ronald Perelman at its helm, now that a federal judge has approved its plan.
The business had been traded on the New York Stock Exchange since 1996, when owner MacAndrews & Forbes took it public. But through Revlon’s newly approved bankruptcy plan, ownership stakes will be handed to secured lenders, while existing shareholders, including MacAndrews chairman Perelman, who controlled around 85 percent of the company as of earlier this year, will be left with nothing.
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Through the plan, the troubled 90-year-old New York-based beauty company that owns the namesake Revlon, Elizabeth Arden and Almay brands will eliminate more than $2.7 billion in debt from its balance sheet, with approximately $1.5 billion of debt outstanding. In exchange, the majority of Revlon’s equity will be owned by its former lenders of a 2020 loan, known as the Brandco lenders.
Revlon is expected to emerge with approximately $285 million of liquidity, to be funded through an equity rights offering, a new money senior secured credit facility, and new asset-based loan.
Ronald Perelman’s daughter, Debra Perelman, who will remain as Revlon’s president and chief executive officer, called the plan “a critical milestone,” stressing that it 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,” she said in a statement. “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.”
Prior to filing for Chapter 11 bankruptcy, Revlon had been struggling with a hefty pile of debt — about $3.7 billion — that it spent much of 2020 renegotiating, which enabled it to avoid a more formal restructuring process back then. But supply chain issues, soaring inflation and increased competition from the likes of The Estée Lauder Cos., Coty Inc. and a plethora of digital start-ups only exacerbated the situation. Those factors, combined with loans coming up for renewal, forced Revlon into bankruptcy in 2022.
Revlon also previously tried to sell several of its brands over the years, cycling through different bankers, but no deals were completed.
Ronald Perelman has been the majority owner of Revlon since the mid-’80s, gaining control via a hostile takeover through his company MacAndrews & Forbes. He took Revlon to new heights in the ’80s and ’90s, when he used the brand to catapult himself into the worlds of society, fashion and Hollywood by tapping such faces as Cindy Crawford, Christy Turlington, Jerry Hall and more.
But in 2020, he revealed that he’d been selling off assets — from companies to fine art — and at the beginning of this year, he offloaded his opulent Lily Pond Lane mansion in East Hampton, New York, for $84.5 million. This was down from the original listing price of $115 million.
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