Avon Products Files for Voluntary Chapter 11 Proceedings, Secures $43MM in DIP Financing

Avon Products (API), a U.S.-based non-operational holding company of the Avon beauty brand, has initiated voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware to address its debt and legacy talc liabilities. Avon’s operating businesses outside the U.S. are not part of the Chapter 11 proceedings._x000D_
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Brazil-based Natura (B3 – NTCO3), which acquired Avon in 2020, has entered into an agreement to purchase the equity interests in Avon’s non-U.S. operations for $125 million in the form of a credit bid, subject to a court-supervised auction process. Natura has committed up to $43 million in debtor-in-possession financing that, subject to court approval, will provide sufficient liquidity to fund API’s obligations during the sale process._x000D_
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“Today’s action and the proposed sale of Avon’s non-U.S. operations will maximize the value of our assets and enable us to address our obligations in an orderly manner,” John Dubel, chairperson of API, said._x000D_
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“We remain focused on advancing our business strategy internationally, including modernizing our direct selling model and reigniting the brand to accelerate growth,” Kristof Neirynck, CEO of Avon, said. “Since becoming CEO earlier this year, I am increasingly energized by our strengths and opportunities, supported by our valued associates and nearly two million representatives around the world.”_x000D_
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Weil, Gotshal & Manges is serving as legal counsel, Ankura Consulting Group is serving as financial advisor and Rothschild is serving as investment banker to API.