NEW YORK Beauty company Revlon is looking to reduce its debt by $170 million by using proceeds from the sale of the Bozzano business in Brazil and proceeds from an equity rights offering that will launch as early as the fourth quarter of 2008.
“By repaying the [MacAndrews & Forbes] Term Loan, we will eliminate our highest cost, nearest maturity debt, which carries an annual cash interest cost of almost $19 million. Improving our capital structure with this important step is consistent with a key aspect of our strategy,” stated David Kennedy, Revlon president and chief executive officer.
To repay the $170 million loan, which matures Aug. 1, 2009, Revlon will use $63 million of the net proceeds from the previously announced sale of its Bozzano business in Brazil. The remaining $30 million or so of net cash proceeds from the July 2008 sales will be used for general corporate purposes.
In a second step, Revlon plans to launch, as early as in the fourth quarter of 2008, a $107 million equity rights offering that would enable stockholders to purchase additional shares of Revlon Class A common stock.
Revlon intends to effect is previously announced 1-for-10 reverse stock split of its Class A and Class B common stock on Sept. 15, 2008, and open for trading on the New York Stock Exchange on a post-split basis on Sept.16, 2008.