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Revlon majority shareholder might extend term loan, increase interest
By Angela McDaniels
Tacoma, Wash., April 20 - Revlon, Inc. said MacAndrews & Forbes Holdings Inc. has proposed that it contribute to Revlon $75 million of the $107 million senior subordinated term loan that is due to it from Revlon's wholly owned subsidiary, Revlon Consumer Products Corp., and amend the term loan to extend its maturity to 2013 and to increase its interest rate to 12½%.
The changes would be made as part of a proposal from MacAndrews & Forbes under which all outstanding shares of class A common stock not held by MacAndrews & Forbes would be converted into a new series of voting preferred stock.
MacAndrews & Forbes holds approximately 75% of the combined voting power of Revlon, according to a company news release.
The new preferreds would have a total liquidation preference of $75 million, or about $3.74 per share, would pay quarterly dividends at the rate of 12½% per year and would be redeemed four years after issuance at the liquidation preference plus accrued dividends.
The investor stated in the proposal that it has no plans to dispose of its equity stake in Revlon, according to the release. But if the company were sold within two years of the preferreds' issuance, the preferred holders would be entitled to participate with the common stock to a limited extent.
If the company were not sold within that time frame, the preferred holders would be entitled to an additional payment of $1.00 per share two years after issuance.
The company said its board will review the terms of the non-binding proposal.
Revlon makes cosmetics and other personal care products and is based in New York.
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