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Revlon Lands In Stress As It Borrowed US$375m in Bankruptcy to Shore Up Supply Chain

Revlon chief restructuring officer Robert Caruso testified Friday that most of Revlon’s raw material vendors have stopped sending shipments, and many were demanding payment of past debts or deposits on future deliveries.

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REVLON received bankruptcy court approval to borrow US$375 million on Friday (Jun 17), saying it would use the funds to shore up supply chain problems that would otherwise imperil the cosmetic maker’s sales during the busy Christmas season.

US Bankruptcy Judge David Jones in New York approved Revlon’s proposed bankruptcy loan on an interim basis after hearing testimony that Revlon was down to US$6 million in cash and struggling to fulfil retail customer orders.

Revlon chief restructuring officer Robert Caruso testified Friday that most of Revlon’s raw material vendors have stopped sending shipments, and many were demanding payment of past debts or deposits on future deliveries.

Revlon will retain about US$300 million of the initial bankruptcy loan for day-to-day business purposes, and use US$75 million to pay down debts at foreign subsidiaries who are not part of the US bankruptcy, Caruso said.

Revlon has lined up US$575 million in total funding for its bankruptcy case, and it will seek approval for the remaining US$200 million at a hearing next month.

Revlon junior creditors and the US Department of Justice’s bankruptcy watchdog raised concerns about some of the terms of that loan, focusing on fees paid to lenders and the potential to reorder the priority in which the company’s lenders would be paid.

Judge Jones deferred potential fights over the loan terms, saying that he would allow junior creditors to raise objections before giving final approval to the loan. Jones said he too would have preferred a “better and less problematic” lifeline for Revlon, but he was convinced that the proposed loan was the best option available to the company.

SMEStreet Edit Desk

SMEStreet Edit Desk is a small group of excited and motivated journalists and editors who are committed to building MSME ecosystem through valuable information and knowledge spread.

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