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Item 1.01
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Entry into a Material Definitive Agreement.
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As previously disclosed, on June 15, 2022, Revlon, Inc. (“Revlon”)
and certain subsidiaries, including Revlon Consumer Products Corporation (“Products Corporation” and together with Revlon, the “Company”) (the Chapter 11 filing entities collectively, the “Debtors”), filed voluntary petitions
for reorganization under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The cases (the “Chapter 11 Cases”)
are being administered under the caption In re Revlon, Inc., et al. (Case No. 22-10760 (DSJ)). The Debtors continue to operate their businesses as “debtors-in-possession”
under the jurisdiction of the Bankruptcy Court and in accordance with the applicable
provisions of the Bankruptcy Code and orders of the Bankruptcy Court.
Also, as previously disclosed, on December 19, 2022, Revlon, Products
Corporation, and certain of Revlon’s other direct and indirect subsidiaries (the “Company Parties”) entered into a Restructuring Support Agreement (the “Original RSA”) with certain of the Company’s prepetition lenders under the
previously disclosed 2020 BrandCo Credit Agreement and the Official Committee of Unsecured Creditors in the Debtors’ Chapter 11 Cases (together, the “Original Consenting Creditor Parties”) regarding restructuring transactions (such
transactions, collectively, the “Restructuring”) pursuant to a Chapter 11 plan of reorganization on the terms and conditions set forth in the RSA.
Also, as previously disclosed, on December 23, 2022, the Debtors filed
the Joint Plan of Reorganization of Revlon, Inc. and Its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 1253] (the “Original Plan”).
Also, as previously disclosed, on January 17, 2023, the Debtors entered
into an agreement (the “Original Backstop Commitment Agreement”) with certain of the Consenting BrandCo Lenders under the RSA (the “Original Equity Commitment Parties”), pursuant to which each of the Original Equity Commitment Parties
thereunder had agreed to backstop, severally and not jointly and subject to the terms and conditions in the Backstop Commitment Agreement, the Aggregate Rights Offering Amount (as defined in the Original Backstop Commitment Agreement).
Also, as previously disclosed, on January 17, 2023, as
contemplated by the Restructuring Support Agreement, the Debtors entered into the Debt Commitment Letter with the Debt Commitment Parties, pursuant to which the Debt Commitment Parties committed to fund up to $200 million in net cash proceeds to the
Debtors in connection with a new senior secured first lien term loan facility (the “Incremental New Money Facility”) upon emergence from Chapter 11. As consideration for
entering into the Debt Commitment Letter, the Debt Commitment Parties will receive a premium of 3.00% on their $200 million funding commitment payable in-kind in the form of additional loans added under the Incremental New Money Facility (the “Debt Commitment Premium”). If the Debt Commitment Letter is terminated, then under certain conditions set forth in the Debt Commitment Letter, the Debt Commitment Parties are
entitled to receive a termination premium of $6 million (3.00% of the $200 million commitment amount) in lieu of the Debt Commitment Premium.
Amended and Restated Restructuring Support Agreement
On February 21, 2023, the Company Parties entered into the Amended and Restated Restructuring Support Agreement (the “Amended RSA”) with the Original Consenting Creditor Parties and certain of the Company’s prepetition lenders under the previously disclosed 2016 Credit Agreement (as defined herein) (together with the
Original Consenting Creditor Parties, the “Consenting Creditor Parties,” and together with the Original Consenting Creditor Parties and the Company Parties, the “RSA Parties”). Capitalized terms not otherwise defined in this “Amended and Restated Restructuring Support Agreement” section of this Current Report on Form 8-K have the
meanings given to them in the Amended RSA which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
Under the Amended RSA, the Consenting Creditor Parties have agreed, subject to certain terms and conditions, to support the First Amended Joint Plan
of Reorganization attached to, and incorporated into, the Amended RSA (the “Amended Plan”). Certain
holders of Claims will receive different treatment under the Amended Plan as compared to the Original Plan, as follows:
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OpCo Term Loan Claims. Each holder of OpCo Term Loan Claims (2016 Term
Loan Claims and 2020 Term B-3 Loan Claims against the OpCo Debtors) shall receive (a) its pro rata share of cash in the amount of $56 million or (b) if such holder makes or is deemed to make the Class 4 Equity Election, such holder’s pro rata
share of 18% of (i) the New Common Stock issued on the effective date of the Amended Plan (the “Effective Date”), subject to dilution by any New Common Stock issued in connection with the Equity Rights Offering (as defined below), including,
for the avoidance of doubt, any New Common Stock issued pursuant to the Backstop Commitment Agreement, in connection with any MIP Awards (as defined in the Amended Plan), and/or upon the exercise of the New Warrants (as defined in the Amended
Plan), and (ii) the Equity Subscription Rights; provided that holders of no more than $334 million of OpCo Term Loan Claims are permitted to elect to
receive cash;
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2020 Term B-1 Loan Claims. Each holder of 2020 Term B-1 Loan Claims shall
receive, either (a) a principal amount of Take-Back Term Loans equal to such holder’s Allowed 2020 Term B-1 Loan Claim or (b) an amount of cash equal to the principal amount of Take-Back Term Loans that otherwise would have been distributable
to such holder under clause (a);
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2020 Term B-2 Loan Claims. Each holder of 2020 Term B-2 Loan Claims shall
receive its pro rata share of 82% of (a) the New Common Stock issued on the Effective Date, subject to dilution by any New Common Stock issued in connection with the Equity Rights Offering, including, for the avoidance of doubt, any New
Common Stock issued pursuant to the Backstop Commitment Agreement, in connection with any MIP Awards, and/or upon the exercise of the New Warrants, and (b) the Equity Subscription Rights; and
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Other Claims. Except as indicated above, there have been no changes to
the treatment of other Claims under the Original Plan, including BrandCo Third Lien Guaranty Claims, Unsecured Notes Claims, General Unsecured Claims, Qualified Pension Claims, or Interests in Revlon.
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As previously disclosed, the Company Parties will conduct an Equity Rights Offering available to eligible holders of certain claims. Under the
Amended Plan, the Equity Rights Offering will be available to holders of OpCo Term Loan Claims and 2020 Term B-2 Loan Claims to raise up to $670 million in cash from the offer and sale of New Common Stock. The New Common Stock issued in the Equity
Rights Offering will dilute the New Common Stock distributed to holders of OpCo Term Loan Claims and 2020 Term B-2 Loan Claims on account of such Claims. The Equity Rights Offering will be fully backstopped by the Equity Commitment Parties (as
defined below), and a portion of the Equity Rights Offering will be reserved for the Equity Commitment Parties.
Pursuant to the Amended RSA and Amended Plan, the Company Parties will not pursue an Acceptable Alternative Transaction in the form of a sale of the
Company’s assets.
The Amended RSA provides that the Debtors shall achieve certain future milestones (unless extended or waived in writing), including:
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No later than February 21, 2023, the Debtors shall file with the Bankruptcy Court: (i) the Amended Plan; and (ii) an amended Disclosure Statement reflecting the Amended Plan;
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No later than February 22, 2023, the Bankruptcy Court shall have entered an order approving (i) the amended Disclosure Statement and (ii) the amended Backstop Motion;
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No later than February 28, 2023, the Debtors shall have commenced the solicitation of votes to accept or reject the Amended Plan;
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No later than April 4, 2023, the Bankruptcy Court shall have entered an order confirming the Amended Plan; and
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No later than April 18, 2023, the effective date of the Amended Plan shall have occurred.
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The commitments of the RSA Parties under the Amended RSA are substantially identical to the obligations under the Original RSA, as previously
disclosed. Each of the RSA Parties may terminate the Amended RSA (and thereby their support for the associated plan of reorganization) under certain circumstances, substantially consistent with the Original RSA.
The foregoing description of the Amended RSA is a summary only and is qualified in its entirety by reference to the full text of the
Amended RSA which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference herein. The representations, warranties and covenants contained in the Amended RSA have been made solely for the purpose of such agreement
and as of specific dates, for the benefit of the parties thereto. In addition, such representations, warranties and covenants (i) may have been qualified by confidential disclosures exchanged between the parties, (ii) are subject to materiality
qualifications contained in the agreements which may differ from what may be viewed as material by investors, and (iii) have been included in the agreements for the purpose of allocating risk between the contracting parties rather than establishing
matters of fact. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of actual facts or circumstances, and the subject matter of representations and warranties may change after
the date as of which such representations or warranties were made. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the agreements, which subsequent information may or
may not be fully reflected in the Company’s public disclosures. The Amended RSA is subject to approval by the Bankruptcy Court.
Amended and Restated Backstop Commitment Agreement
On February 21, 2023, as contemplated by the Amended RSA, the Company Parties entered into the amended and restated backstop commitment agreement
(the “Amended BCA”) with the Original Equity Commitment Parties and certain of the Consenting 2016 Lenders under the Amended RSA (together with the Original Equity
Commitment Parties, the “Equity Commitment Parties”), pursuant to which each of the Equity Commitment Parties has agreed to backstop, severally and not jointly and subject
to the terms and conditions in the Backstop Commitment Agreement, the upsized $670 million Equity Rights Offering (the “Upsized Aggregate Rights Offering Amount”), subject
to the Excess Liquidity Cutback (as defined below). Capitalized terms not otherwise defined in this “Amended and Restated Backstop Commitment Agreement” section of this Current Report on Form 8-K have the meanings given to them in the Amended Plan
and/or the Backstop Commitment Agreement, which are attached hereto as Exhibits 99.1 and 10.2, respectively, and are incorporated herein by reference.
The Amended BCA provides that (i) each of the Equity Commitment Parties will, subject to the terms and conditions in the Amended BCA, purchase its
agreed percentage (the “Backstop Commitment Percentage”) of the New Common Stock (as defined in the Amended Plan) representing the unsubscribed portion of the Subscription
Amount, (ii) each of the Equity Commitment Parties will, subject to the terms and conditions in the Backstop Commitment Agreement, purchase its agreed percentage of the New Common Stock representing the Direct Allocation Amount, and (iii) each of the
Equity Commitment Parties will, subject to the terms and conditions in the Amended BCA, subscribe for, and at the closing purchase, the New Common Stock offered to such Equity Commitment Party in connection with the Equity Rights Offering. As
consideration for entering into the Backstop Commitment Agreement, each Equity Commitment Party will receive, upon the closing of the Equity Rights Offering, its Backstop Commitment Percentage of a 12.5% equity commitment premium on the $670 million
aggregate amount of the initial funding commitments, which amount shall be payable in the form of New Common Stock at a price per share calculated at a 30% discount to Plan Equity Value. If the Amended BCA is terminated, then under certain conditions
set forth in the Amended BCA, the Equity Commitment Parties are entitled to receive an equity termination premium of $83.75 million in cash (representing 12.5% of the $670 million Revised Aggregate Rights Offering Amount).
The shares of New Common Stock that will be issued to the Equity Commitment Parties under the Amended BCA (other than the shares of New Common Stock
issued in payment of commitment premiums and, for the avoidance of doubt, the shares of New Common Stock issued in respect of an Equity Commitment Party’s purchase of the New Common Stock offered to it in connection with the Equity Rights Offering)
will be issued in a private placement exempt from registration under Section 5 of the Securities Act pursuant to Section 4(a)(2) and/or Regulation D thereunder and will constitute “restricted securities” for purposes of the Securities Act.
To the extent that, as of the Closing Date (as defined under the Amended BCA), the sum of (i) unrestricted cash and cash equivalents of the loan
parties under the First Lien Exit Facilities and (ii) undrawn availability under the Exit ABL Facility (excluding the effect of any temporarily increased advance rates under the Exit ABL Facility that will not remain in effect through the maturity
date of such facility), exceeds $285.0 million (such excess, “Excess Liquidity”), then such Excess Liquidity will be applied, on a dollar for dollar basis, first, to reduce
the aggregate amount of the Equity Rights Offering on a dollar for dollar basis to not less than $650 million; second, in an amount of up to $12.0 million to pay the Debt Commitment Premium and Funding Discount (on a ratable basis) in cash; third, to
further reduce the aggregate amount of the Equity Rights Offering on a dollar for dollar basis to not less than $625 million; fourth, to reduce the amount of the Incremental New Money Facility on a dollar for dollar basis to the extent that the
aggregate amount of the First Lien Exit Facilities is no less than $1.275 billion; and fifth, 50% of any remaining Excess Liquidity to further reduce the amount of the Incremental New Money Facility and 50% of any remaining Excess Liquidity to
further reduce the amount of the Equity Rights Offering (collectively, the “Excess Liquidity Cutback”).
Additionally, certain amendments were made under the Amended BCA with respect to the circumstances under which the Equity Commitment Parties would be
entitled to receive the 12.5% termination premium.
The foregoing description of the Amended BCA is a summary only and is
qualified in its entirety by reference to the full text of the Amended Plan and Amended BCA, which are attached hereto as Exhibits 99.1 and 10.2, respectively, to this Current Report on Form 8-K and incorporated by reference herein.
DIP Plan Milestone Extension
In connection with the Chapter 11 Cases, Revlon, Products Corporation and certain of Revlon’s direct and indirect subsidiaries
entered into (i) the Super-Priority Senior Secured Debtor-in-Possession Asset-Based Credit Agreement, dated June 30, 2022, by and among Products Corporation, as the Borrower, Revlon, as Holdings, the lenders party thereto and MidCap Funding IV
Trust, as Administrative Agent and Collateral Agent (the “DIP ABL Credit Agreement”) and (ii) the Super-Priority Senior Secured Debtor-in-Possession Credit Agreement,
dated as of June 17, 2022, by and among Products Corporation, as the Borrower, Revlon, as Holdings, the lenders party thereto and Jefferies Finance LLC, as Administrative Agent and Collateral Agent (the “DIP Term Loan Credit Agreement” and together with the DIP ABL Credit Agreement, the “DIP Credit Agreements”).
On February 21, 2023, the Debtors amended (i) Section 6.20(g) of the DIP ABL Credit Agreement and (ii) Section 6.17(g) of the
DIP Term Loan Credit Agreement to extend the required milestone date (such milestone date, the “DIP Confirmation Milestone Date”) for the entry of an Acceptable
Confirmation Order (as defined in the DIP ABL Credit Agreement and the DIP Term Loan Credit Agreement) from April 1, 2023 to April 4, 2023.
On February 21, 2023, the Debtors amended (i) Section 6.20(h) of the DIP ABL Credit Agreement and (ii) Section 6.17(h) of the
DIP Term Loan Credit Agreement to extend the required milestone date (such milestone date, the “DIP Emergence Milestone Date”) for occurrence of the Plan Effective
Date (as defined in the DIP ABL Credit Agreement and the DIP Term Loan Credit Agreement) from April 15, 2023 to April 18, 2023.