Revlon Seeks Approval of up to $1.025B in DIP Funding

Revlon Inc. on June 16 disclosed the details of its proposed debtor-in-possession facility (DIP) in a motion filed with the bankruptcy court in Manhattan overseeing its Chapter 11 proceedings seeking interim and final approval of the facility.

As reported, the company said in its news release announcing its Chapter 11 filing that it had obtained a $575 million term DIP. In addition, and as also reported, the company also disclosed in a Form 8-K filed June 16 with the Securities and Exchange Commission that it had also obtained a $400 million DIP ABL in addition to the term facility, with more than half of that facility rolling-up obligations held by the DIP ABL lenders under the company's prepetition ABL facility, and the rest available for general corporate purposes.

According to the company's motion to approve the DIP, filed later in the day on June 16, the term loan portion of the facility also includes incremental capacity in the amount of $450 million that is uncommitted and available to the company in the sole discretion of the DIP term loan lenders "exclusively for the purpose of refinancing all or a portion of [the company's] prepetition ABL credit facility."

According to the DIP motion, however, almost all of the company's pre-petition ABL will be rolled-up by the DIP ABL. More specifically, the motion states, the  DIP ABL would consist of $270 million in LIFO ABL DIP commitments, of which $109 million would be deemed immediately drawn to satisfy outstanding pre-petition LIFO ABL obligations, and $130 million of SISO ABL DIP loans, the entire amount of which would be deemed drawn automatically to satisfy the company's pre-petition SISO ABL obligations.

According to the first-day declaration in the case filed by Robert Caruso, the company's chief restructuring officer, total obligations under the ABL facility are $289 million, comprised of $109 million in tranche A, or LIFO ABL loans, $130 million in SISO term loans, and $50 million in LIFO term loans, the only portion of the prepetition ABL that does not appear to be rolled-up under the DIP.

According to the motion, $375 million of the term DIP would be available upon interim approval of the DIP (which includes $76.875 million available exclusively to refinance all or a portion of the company's foreign ABTL facility), with the remaining $200 million available upon final approval.

Interest under the term DIP would be Sofr+775, with a 1% Sofr floor. As for the ABL, interest under the LIFO ABL DIP would be ABR+250, with a 1.5% ABR floor (ABR defined in loan documents as the highest of the prime rate, the federal funds effective rate plus 0.5%, and adjusted term Sofr rate plus 1%) while under the SISO portion interest would be ABR+475, with a 2.75% ABR floor.

Fees for the term DIP include a 1% upfront fee, a 1% repayment fee, a 1.5% backstop fee, and an arrangement fee, the amount of which was not disclosed.

As reported, Jefferies Finance is the administrative agent and collateral agent for the term DIP and MidCap Funding IV Trust is administrative agent and collateral agent for the ABL DIP (with Crystal Financial d/b/a SLR Credit Solutions serving in those capacities for the SISO DIP for as long as it is a lender under the SISO DIP).

As for milestone deadlines, the DIP facility requires, among other milestones, a Chapter 11 filing by June 15 (completed); entry into a restructuring support agreement, or RSA, reflecting an acceptable reorganization plan by Nov. 1; filing a reorganization plan and disclosure statement by Nov. 30; plan confirmation by April 1, 2023; and emergence from Chapter 11 by April 15, 2023.

The hearing on first-day motions, including interim DIP approval, got underway late this afternoon.