As per the June 16 reports of ET Now, Reliance Industries is planning to take over the American multinational cosmetics company Revlon in the United States. This move came after the cosmetics giant reported bankruptcy a couple of days ago.
Mukesh Ambani’s Multinational conglomerate is assumed to put an offer on Revlon after the company announced it has been bankrupted. Revlon had given a very strong competition to the other cosmetics companies for ages. The company is well known for its lipsticks and nail polish. This bankruptcy was reported after the company faced difficulties in the supply chain and the surge in the price of raw materials which made the suppliers ask for advance payments.
The company filed a petition in the court on June 15 for getting Chapter 11 bankruptcy protection so that it can handle its outstanding payments which is ranging from $1 billion to $10 billion. In the first quarter, it was found that the cosmetics company holds financial obligations worth $3.3 billion over a long period.
After submitting the petition the CEO of the company said that this would assist the company to deliver their well-known and most loved products to the customers as they did for many years and at the same time it will help in creating an unobstructed path for the company’s future growth.
Reliance Industries has been seen diversifying itself in the past few years as it moved into the fashion and personal care businesses. The Indian multinational conglomerate owned by the richest man of India has already set up a secure position in the telecom and retail businesses a couple of years ago.
The shares of Revlon witnessed a rise of 20% in the premarket trade after this news came to the public while the shares of Reliance were raised by 1.9% in the Indian Market.
The multinational cosmetic was founded 90 years ago in 1932 by the Revson brothers and chemist Charles Lachman. Since that time the company had a secure place in the cosmetic sector and gave tough competition to many other cosmetics companies. But Revlon was not able to sustain the rapid changes in the market and gradually it lost its position to its rival companies.
The company was already under many debts before the Covid-19 surge but the problems intensified with the beginning of the pandemic. The stakes of the company fell by 21% within a year of the Coronavirus outbreak.
The company might receive funding of $575 million from its lenders if its petition is accepted.
