By Dietrich Knauth
(Reuters) – Bankrupt cosmetics giant Revlon Inc on Monday reached a restructuring agreement which would turn over ownership of the company to its lenders and wipe out current shareholders.
Revlon now has the support of a faction of critical secured lenders and its unsecured creditors, who had previously been at odds during the company’s bankruptcy.
The restructuring agreement, which must be approved by a U.S. bankruptcy judge before it takes effect, would provide $44 million to Revlon’s unsecured creditors, who would otherwise be last in line for repayment of their debts.
The secured lender faction, which are known as the Brandco lenders and which include private equity and hedge funds such as Ares Management and Oak Hill Advisors, are owed close to $3 billion.
The restructuring agreement requires Revlon to get court approval on April 3, which would allow the company to exit bankruptcy on April 17, 2023.
Revlon has said it is exploring a sale of the company as a potential exit from Chapter 11. The restructuring agreement allows Revlon to pursue a sale, as long as the offer is high enough to fully repay the Brandco lenders.
Revlon filed for bankruptcy in June, saying its $3.5 billion debt load left it too cash-poor to make timely payments to critical vendors in its cosmetics supply chain.
(Reporting by Dietrich Knauth; editing by Amy Stevens and Anna Driver)