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GLOBAL cosmetic giant Revlon Inc will likely pursue debt restructuring which would hand ownership of the company over to lenders and wipe out stockholders.
This is according to an agreement between the bankrupt company and two key creditor groups.
The company entered a restructuring support agreement with a critical lender group and its official committee of unsecured creditors on Monday, filings show.
The deal calls for handing out ownership stakes in Revlon to secured lenders, while mostly wiping out the company’s lowest-ranking creditors and leaving existing stockholders with nothing.
The agreement assumes Revlon will seek bankruptcy court approval of the plan to hand ownership over to lenders in the coming months, but allows the company to sell itself instead if a deep-pocketed buyer is found.
Under the deal, Revlon must submit the plan to its bankruptcy judge this week, and exit Chapter 11 protection in April.
Revlon filed for bankruptcy in June after a debt load of more than US$3,5 billion proved too burdensome.
The company, owned by billionaire Ron Perelman’s MacAndrews & Forbes, has struggled in recent years to keep up with newer brands.– The Washington Post, via IOL News