Economy

Revlon shares plummet after news of possible bankruptcy

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The share price of Revlon, a cosmetics giant present in more than 150 countries, fell by half last Friday (10) after news began to circulate that the company could declare bankruptcy.

The brand is controlled by the company MacAndrews & Forbes, owned by billionaire Ronald Perelman.

On Thursday (9), Revlon’s share, which has accumulated a drop of more than 80% in the last six months, was worth US$ 4.34 (R$ 21.62). On Friday, it fell 52.76% to US$ 2.05 (R$ 10.21).

According to a source heard by the Wall Street Journal, debt and high competition in the sector, in addition to inflation and lack of supplies more recently, influenced the decision.

Sales increased 7.8% in the first quarter of 2022 compared to the same period in 2021, according to the company’s latest balance sheet. The result, resulting from the gradual recovery of the economy after Covid-19, was not enough.

The net loss at the beginning of this year totaled US$ 67 million (R$ 333.8 million), and the company has a debt of US$ 3.3 billion (R$ 16.4 billion) due in 2024 and 2025.

The company still faces a legal mishap after Citibank mistakenly paid a debt, it alleges. The bank says it transferred an $866 million loan to one of Revlon’s creditors in full, when the intention was to pay only part of the amount.

Citibank filed a lawsuit to recover the money, but the request was denied by a US federal judge last year. The decision can still be reviewed.

In 2020, the brand ended up getting the support of investors to avoid filing for bankruptcy. Shareholders agreed to exchange about 70% of the $343 million debt that would mature in 2021.

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