Gordian Group President Peter Kaufman – On Restructuring and Bondholders | New York Post

Ron Perelman’s Revlon plagued by $90M in mystery bondholders

NY Post

November 9, 2020

Revlon is supposed to be known for its vanishing creams, not its disappearing bondholders.

Ron Perelman’s Revlon is in a major tussle with lenders over some $90 million in bonds with mystery owners whose bizarre vanishing act could push the company into bankruptcy, The Post has learned.

The cosmetics company has been in talks to refinance some $343 million of bonds ahead of a Nov. 16 default deadline. But the company has angered bondholders, including billionaire Carl Icahn, by telling them that it cannot afford to pay more than 32 cents on the dollar in cash because it cannot find the holders of about $90 million of bonds, who now stand to get paid in full.

The two sides are currently in negotiations and some sources say the talks are going well so far. But time to make a deal is also running out.

The makeup company has given its bondholders until Tuesday at 5 p.m. to exchange their debt for 32 cents in cash, or a combination of cash and new loans worth about 50 cents, sources said. Revlon could extend the deadline by a day or two, but not by much longer or risk being unable to facilitate the exchange by Nov. 16, sources said.

Experts say it’s normal for companies to set aside 100 percent of a bond’s value to holders who can’t be located to agree to a debt restructuring. But that the percentage of mystery bondholders is normally between three to five percent of the total.

“It’s certainly not customary to have that percentage be the magnitude of 26 percent,” said Peter Kaufman, a distressed investment banker and head of Gordian Group LLC who has never seen such a high rate of mystery bondholders.

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