Cosmetics giant Revlon, Inc. (NYSE: REV) has filed for bankruptcy under Chapter 11 in a U.S. Bankruptcy Court of New York. The filing includes the company’s operations in the U.S., Canada and the U.K.
Following the news, REV stock declined 9% in the pre-market trading session on Thursday.
The President and CEO of Revlon, Debra Perelman, said, “Consumer demand for our products remains strong – people love our brands, and we continue to have a healthy market position. But our challenging capital structure has limited our ability to navigate macro-economic issues in order to meet this demand.”
“By addressing these complex legacy debt constraints, we expect to be able to simplify our capital structure and significantly reduce our debt, enabling us to unlock the full potential of our globally recognized brands,” she added.
Once the filing is approved, Revlon could get debtor-in-possession (DIP) financing of $575 million from its lenders for its daily operations.
Stock Rating
Based on a single Hold, the stock has a Hold consensus rating. REV’s average price target of $8.50 implies 277.8% upside potential from current levels. Shares have lost 85.6% over the past year.
Conclusion
Even though Revlon has filed for bankruptcy, it plans to run its international operations and work towards boosting growth while dealing with rising inflation and supply chain issues.
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