Revlon's bankruptcy plan would hand ownership to lenders

Revlon has reached a restructuring agreement to give ownership of the company to its lenders and wipe out current shareholders, including its owner Ron Perelman.

According to the restructuring agreement, the company would aim to raise $650 million in new equity and seek to exit the Chapter 11 bankruptcy process by April 2023.

Revlon fell into bankruptcy in June 2022 after facing supply chain issues and large debt. At the time, the group said the filing would allow it to implement a financial restructuring of Revlon’s legacy capital structure and improve its long-term outlook.

The new deal would provide $44 million to Revlon's unsecured creditors. Secured lenders, including private equity and hedge funds like Ares Management and Oak Hill Advisor, are owed around $3 billion.

The agreement requires Revlon to get approval from the US bankruptcy court by 3 April 2023, which would allow the company to exit bankruptcy on 17 April 2023.

In October 2022, Revlon said it was exploring a sale of the company as a potential exit from Chapter 11. The restructuring agreement would allow Revlon to pursue a sale, as long as the offer is high enough to fully repay its secured lenders.