Feb 21 (Reuters) – Revlon Inc (REVRQ.PK) on Tuesday introduced a cope with a holdout faction of lenders, eradicating the biggest remaining roadblock to a plan that might enable the cosmetics maker to exit from chapter by April.
With the most recent settlement in place, Revlon now has the assist of all of its main creditor teams, eliminating a lingering “risk that litigation and complicated disputes would overwhelm” Revlon’s restructuring effort, Revlon legal professional Alice Eaton advised U.S. Chapter Decide David Jones at a listening to in Manhattan.
Jones stated Revlon may now ship its restructuring proposal to collectors for a vote, a key milestone within the firm’s chapter case. If accredited by collectors and the court docket, Revlon’s restructuring plan would minimize $2.7 billion in debt, cancel current fairness shares, and lift $670 million via the sale of fairness within the reorganized firm.
The holdout faction, which financed Revlon’s buy of cosmetics and perfume firm Elizabeth Arden in 2016, had sued Revlon and its senior lenders over a 2020 mortgage that allowed the corporate to borrow extra cash and granted the senior lenders extra management over Revlon’s mental property belongings.
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Beneath the brand new settlement, the 2016 lenders can select to obtain as much as $56 million in money, or they’ll forgo money funds and obtain as much as 18% of the corporate’s post-bankruptcy fairness shares.
Tuesday’s deal doesn’t change the phrases of earlier settlements that Revlon reached with its senior lenders and junior collectors.
The senior lenders will obtain many of the firm’s fairness, valued at $2.75 billion to $3.25 billion. Junior collectors, together with retirees with unpaid pension claims and customers who introduced private harm lawsuits towards Revlon, might be paid as much as $44 million.
Revlon is majority-owned by Ron Perelman’s MacAndrew & Forbes, which held 85% of the corporate’s shares on the time of its chapter submitting. The corporate’s inventory noticed a surge in curiosity from retail buyers final 12 months, buying and selling above $8 per share early within the firm’s chapter. They traded at $0.66 on Tuesday.
Revlon, which has a 91-year historical past promoting lipstick, nail polish and different magnificence merchandise, filed for chapter in June, saying its $3.5 billion debt load and pandemic-related disruptions left it too cash-poor to make well timed funds to essential distributors in its cosmetics provide chain.
Reporting by Dietrich Knauth, Modifying by Alexia Garamfalvi and Invoice Berkrot
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