Revlon Inc. is telling investors that if it can’t restructure its debt in the coming days, it could file for bankruptcy. But some bondholders may be banking on the makeup company’s majority owner, Ron Perelman, bailing it out.

The makeup company has two weeks to complete a $343 million bond swap or otherwise eliminate the notes. If it fails, it would trigger a $1 billion loan repayment in mid-November. Revlon lacks the liquidity to pay down the debt if investors balk at the exchange, forcing it to weigh options including a Chapter 11 filing to stay in business, according to company debt documents.

So far, Revlon has had little luck convincing a majority of investors to sign onto a deal. It’s been extending deadlines and tweaking terms of the exchange. Its most recent effort garnered participation from holders of less than 14% of the bonds by an Oct. 23 early deadline that’s since been extended.

“If bondholders don’t exchange, they’re betting Ronald Perelman or another stakeholder would put capital into this company, otherwise it files,” Bloomberg Intelligence analyst Phil Brendel said in an interview.

Unwinding An Empire
But the billionaire, who owns 87% of the company, has been shedding assets in recent months. He’s put his Manhattan mansion, prizes from his art collection and his superyacht on the market -- not exactly signs that he’s ready to invest more money in a struggling firm. Last month, Perelman, 77, said he planned to “clean house, simplify and give others the chance to enjoy some of the beautiful things that I’ve acquired.”

​Revlon’s Chief Executive Officer Debra Perelman is Ron’s daughter, and the family dynamics may complicate the calculus around putting more money in the firm, Brendel said.

“Perelman’s recent sales are drawing attention due to their sudden and voluminous nature, appearing almost forced” Brendel said. “But Revlon isn’t like Perelman’s other portfolio companies with his daughter as CEO. That’s a factor to consider in an otherwise tough decision.”

Revlon said in a statement to Bloomberg that its “focus remains on completing the amended exchange offer, which incorporates feedback from ongoing discussions with many of our noteholders and other key constituents. As a company, we remain committed to taking the right actions to protect our liquidity, managing through the COVID-19 pandemic and ensuring that we have debt maturity runway to allow us to continue executing our turnaround strategy.”

A representative for Perelman’s holding company MacAndrews & Forbes declined to comment.

Revlon hasn’t made a final decision about a bankruptcy that would keep it operating and talks between the company, advisers and creditors are ongoing, said people with knowledge of the matter who asked not to be named discussing a private transaction. Certain Revlon investors have been in private negotiations with the company that limit their ability to trade its debt, the people added.

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