Revlon plans to pay down debt through rights offer

Cosmetics company Revlon Inc. said Wednesday it would launch an equity rights offering to help pay down a $170 million loan.

The company said it would use the stock rights offering, to be launched as early as the fourth quarter, to raise $107 million. The debt also will be paid down with $63 million from the proceeds of the sale of its Bozzano business in Brazil, which was announced in July.

Under the rights offering, holders of Class A or Class B common stock could get the right to buy shares at a price yet to be determined by Revlon's independent directors.

"By repaying the M&F Term Loan, we will eliminate our highest cost, nearest maturity debt, which carries an annual cash interest cost of almost $19 million," Revlon Chief Executive David Kennedy said in a statement. "Improving our capital structure with this important step is consistent with a key aspect of our strategy."

The company also said Wednesday that it plans a previously announced 1-for-10 reverse stock split of Class A and Class B common stock on Sept. 15. It will open for trading on a post-split basis on Sept. 16.