Revlon Boosts Offer, Secures Financing to Ride Out Pandemic

(Bloomberg) -- Revlon Inc. increased the size of a $1.8 billion plan to rework its debt in an effort to increase liquidity and ride out the pandemic, according to people with knowledge of the situation.

The cosmetics company tacked on $30 million to a senior secured term loan in its refinancing package to make it $880 million total, the people said, asking not to be identified discussing a private matter. Revlon also signed a new revolving credit facility of about $100 million with certain lenders, the people said. Both provide the company with further support to ride out the loss of sales caused by the coronavirus outbreak.

Revlon will also continue talks with debt holders beyond a now-expired April 23 deadline for the offer, said the people. A representative for the New York-based company declined to comment.

The refinancing plan is the latest from billionaire Ronald Perelman’s cosmetics empire to ease its debt load and buy it more time to focus on a business turnaround. It would replace a smaller $850 million package arranged earlier by Jefferies Financial Group Inc.

Lenders opposing both deals holding more than 51% of the loan amount signed a co-operative agreement last week, Bloomberg reported. Those lenders want to protect certain assets that would be pledged to the new debt. The proposed transaction needs a majority of lenders to approve an amendment to the credit facility.

Revlon and its debt holders have been negotiating for weeks to address its liabilities. But talks became complicated when the coronavrius pandemic hit and clouded the company’s outlook.

Approval Pending

Revlon still expects to win the approval of more than half of its lenders, a person close to the company said. It’s seeking advice from attorneys at Paul Weiss Rifkind Wharton & Garrison, the people said. A representative for Paul Weiss declined to comment.

A group of lenders is organized with law firm Arnold & Porter. Certain bondholders are represented by law firm Stroock & Stroock & Lavan.

Revlon, controlled by Perelman’s MacAndrews & Forbes Inc., has struggled to remain relevant and stem falling sales amid competition from Estee Lauder Cos. and a host of smaller companies that have used social media to lure away customers. Revlon has more than 15 brands, including Elizabeth Arden and Elizabeth Taylor, that it markets in more than 150 countries.

The company’s debt has been trading at distressed levels. Its bonds coming due 2021 fell to fresh lows of around 58 cents on the dollar, according to Trace bond trading data. That’s down from a peak of more than 96 last month when the first refinancing deal was announced. Revlon’s term loan is quoted around 42 cents on the dollar, according to Bloomberg data.

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