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Revlon to receive $100 million credit line under MacAndrews & Forbes proposal
By Sara Rosenberg
New York, Dec. 18 - Revlon Inc. received a proposal under which MacAndrews & Forbes would provide the company with a $100 million senior unsecured line of credit due Dec. 1, 2005 with interest payable in kind.
Furthermore, Revlon would make a $50 million rights offering allowing shareholders to purchase additional shares of Class A common stock. MacAndrews & Forbes has agreed to purchase its pro-rata share of the rights offering and all of the Class A common stock not purchased by other shareholders.
Revlon said it expects that MacAndrews & Forbes proposal and the effect on EBITDA of accelerating parts of the growth plan, including advertising spending and strengthening in-store merchandising and marketing presence, will require an amendment of its credit agreement, as well as a waiver of its EBITDA covenant for the fourth quarter of 2002. Based on preliminary discussions with its bank group, the company said it believes that an amendment and a waiver are attainable.
"This investment by MacAndrews & Forbes will enable Revlon to continue to take the actions necessary to strengthen and aggressively grow our business for the benefit of our Company, our retail partners, and our consumers," said Jack Stahl, president and chief executive officer at Revlon, in a news release.
A special committee has been formed to consider the MacAndrews & Forbes proposal. Subject to committee approval, it is expected that the $100 million credit line would be available in January 2003 and the rights offering would be consummated in the second quarter of 2003.
Revlon is a New York manufacturer, marketer and seller of cosmetics and skin care, fragrances and personal care products.
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