Latest News by Industry
• Revlon will use $300 million to run day-to-day business operations and use $75 million to pay down debts at foreign subsidiaries
• Company testified it was down to $6 million in cash and struggling to fulfill retail customer orders
US bankruptcy court on Friday has approved Revlon Inc (NYSE: REV) to borrow $375 million after the company said that it would use the funds to fix the supply chain problems that would otherwise jeopardize the sales of the cosmetic maker during the busy Christmas season.
Revlon’s proposed bankruptcy loan was approved by Bankruptcy Judge David Jones in New York on an interim basis.
The cosmetic giant’s chief restructuring officer Robert Caruso testified on Friday that Revlon was down to $6 million in cash and raw material vendors have stopped sending shipments, with many are demanding payment of past debts or deposits on future deliveries.
Caruso said without access to raw materials, Revlon will struggle to fulfil retail customer orders, leaving the company with dwindling cash to solve its supply problem
Revlon is currently able to fill 70% of customer orders without backlog or cancellations, compared to an industry standard of 90-95%, he added.
In a worst-case scenario, Revlon could also face impacts into 2023 since retailers will be making long-term decisions in September about which products to stock, Caruso said.
Reliance considering takeover bid
Revlon will seek approval for another $200 million at a hearing next month, as the company has lined up $575 million in total funding for its bankruptcy case.
Shares of the cosmetic company on Friday jumped almost 89% to close at $3.68 in its biggest single-day gain on record.
The surge followed after ET Now reported that India’s Reliance Industries Ltd, controlled by billionaire Mukesh Ambani, is mulling a takeover bid, citing people familiar with the matter.
Revlon filed for Chapter 11 protection late Wednesday, saying supplier demands impacted its ability to pay interest on $3.5 billion in company debt.
Picture Credit: Entrepreneur
ALSO READ:
Musk, Tesla, SpaceX sued for $258 billion over alleged Dogecoin pyramid scheme
GM hikes Hummer EV price by more than $6,000 as commodity, shipping costs jump