Revlon Inc. said it has obtained adequate support from bondholders to avert a bankruptcy filing.
The New York-based cosmetics company said on Thursday that it has determined that close to 70% of the holders of a bond nearing maturity agreed to a debt-swap deal, gaining Revlon more time to pay off its loans.
Revlon, backed by billionaire Ron Perelman’s MacAndrews & Forbes Inc. and run by his daughter Debra Perelman, has been struggling with a heavy debt load, heightened competition, and changing consumer tastes. These struggles intensified with the onset of the coronavirus pandemic, which hit Revlon’s sales of lipstick and makeup as Americans used masks and spent more time at home.
Revlon has a $343 million bond which comes due on Feb.15. However, its debt agreements contain a requirement that this bond be refinanced at least three months before maturity, on Nov. 15, or it would trigger over $1 billion of senior loans to come due immediately. Since Revlon had less than $350 million of liquidity as of last month, the company wouldn’t be able to repay that amount and would have to seek bankruptcy protection.
The bond had been trading at heavily distressed levels of roughly 20 and 30 cents on the dollar for much of the past few months, as investors expected the company to seek bankruptcy protection.