- Last week it looked like Revlon could in fact go bust – but it managed to pull off the bond swap and so survives.
- The business itself is suffering badly from the coronavirus and so we might think it’s a geared to recovery stock.
- Well, yes, except the real value to the stock is up to Ron Perelman more than anyone, or anything, else.
Revlon has avoided bankruptcy
Revlon has avoided a Chapter 11 filing this time around at least. The risk was that an issue of bonds due in February could not be rolled over – well, pretty certainly could not be – and therefore investors needed to take a haircut. Whether they would agree to do so meant that the Chapter 11 filing was at least being suggested and could even have happened.
The refinancing of those bonds – done by a massive haircut to bondholders – has happened and the immediate risk of bankruptcy has receded.
Revlon will avoid a bankruptcy filing that seemed imminent after entering into an exchange offer with bond holders, the cosmetics giant announced Thursday.
Under the deal, which is expected to close today, the company exchanged approximately $236 million of senior notes due in 2021, or approximately 68.8% of its aggregate outstanding principal amount, for either 32.5 cents on the dollar in cash or a combination of cash and new debt, Fashion Network reported.
