Revlon will shed more than $2.7 billion in debt and obtain some $285 million in fresh liquidity, following a reorganization plan approved Monday by the U.S. Bankruptcy Court for the Southern District of New York.
The cosmetics giant will exit Chapter 11 as a private company some time in late April, according to its press release Tuesday. Its new owners are mostly its old lenders.
The company, whose many brands also include Elizabeth Arden, Almay, American Crew, Juicy Couture, Britney Spears, Curve, John Varvatos and Christina Aguilera, will emerge with about $1.5 billion in debt.
Revlon’s bankruptcy timeline has been in place since late last year, when its lenders hammered out an agreement to take it over and wrap things up by April. The company filed for bankruptcy in June weighed down with debt and grappling with severe inventory gaps.
Once its bankruptcy is officially complete, the cosmetics company still faces the challenge of how to turn its fortunes around. The strength of its own brand name or that of the others in its stable hasn’t been enough to keep up with rivals like L’Oréal that have made important investments in tech and other areas, analysts have said. In some ways its bankruptcy filing came late; now a turnaround must be executed in a tough economic environment.
Debra Perelman, who is staying on as chief executive, in a statement Tuesday said the company’s “new capital structure and increased liquidity will enable us to continue to animate our brands in the market.”
“The plan confirmation is a critical milestone and positions Revlon to emerge from the restructuring process with a greatly simplified capital structure that will support the business going forward,” she said.