Revlon to reduce debts

- Last updated on GMT

Related tags: Revlon, Debt

Revlon has announced it is to eradicate $780 million of debt by the
end of 2004's first quarter. The troubled US company - reporting a
net loss of $153.8 million for 2003 - has signed an agreement to
reduce debt by 50 per cent.

Revlon has signed a 'debt for equity exchange' agreement with Fidelity Management & Research and MacAndrews & Forbes - Revlon's principal shareholder - to strengthen the company's balance sheet and increase the liquidity and float of its common stock.

"This refinancing is a crucial step in the company's journey to achieve long-term profitable growth. This dramatic de-leveraging provides an important platform from which we can further build momentum,"​ said Revlon CEO Jack Stahl.

Despite recording a net loss of $153.8 million, Revlon's net sales for the year rose 16 per cent to $1.29 billion. Sales growth however was absolutely concentrated in Revlon's fourth quarter, achieving a 73.3 per cent increase in comparison to a 2.6 per cent average for the first 9 months of 2003.

Revlon stated that the fourth quarter's positive turn-around primarily reflected significantly lower returns and allowances - borrowed back from 2002 growth-plan charges - and from a positive currency translation.

The company's continuing growth plan is claimed to involve increasing the effectiveness of the company's advertising and in-store promotional marketing, discontinuing select products and adjusting prices to strengthen the company's new product development process, in order to support the underlying business.

According to the new agreement MacAndrews & Forbes is to exchange an approximated $475 million of debt for equity, and the Institutional Investor - Fidelity Management and Research - is also to exchange $155 million.

In addition to the exchange offers Revlon's refinancing plan includes further rights and equity offerings to ensure that the debt reduction reach $830 million by the end of 2004 and $930 million by March 2006, the company announced.

Related topics: Business & Financial

Related news

Show more

Follow us

Products

View more

Webinars