Item 1.03. Bankruptcy or Receivership.
Chapter 11 Filing
On June 15, 2022 (the “Petition Date”), the Company and certain of its subsidiaries listed in Exhibit 99.1, including Revlon Consumer Products
Corporation (“Products Corporation”) (collectively, the “Filing Subsidiaries” and, together with the Company, the “Debtors”), filed voluntary petitions (the “Bankruptcy Petitions”) for reorganization under Chapter 11 of
the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (such court, the “Court” and such cases, the “Cases”). The Debtors will continue to operate
their businesses as “debtors-in-possession” under the jurisdiction of the Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Court. To ensure their ability to continue operating in the ordinary course of
business, the Debtors have filed with the Court motions seeking a variety of “first-day” relief (collectively, the “First Day Motions”), including authority to obtain debtor-in-possession financing, pay employee wages and benefits and pay
vendors and suppliers in the ordinary course for all goods and services provided after the Petition Date.
Debtor-in-Possession Financing
In connection with the Bankruptcy Petitions, the Debtors expect to
seek approval from the Court to enter into (i) a superpriority senior secured debtor-in-possession asset-based loan facility (the “DIP ABL Facility”), in the maximum
aggregate principal amount of $400 million, with certain financial institutions party thereto as lenders and MidCap Funding IV Trust, as administrative agent and collateral agent, (ii) a superpriority senior secured debtor-in-possession term loan
facility (the “DIP Term Loan Facility”), in the aggregate principal amount of $575 million, with certain financial institutions party thereto as lenders and Jefferies Finance, LLC, as administrative agent and collateral agent, and (iii) a
superpriority junior secured debtor-in-possession intercompany credit facility (the “Intercompany DIP Facility” and, together with the DIP ABL Facility and the DIP Term Loan Facility, the “DIP Facilities”) with the Debtors that are BrandCos (as defined in the BrandCo Credit Agreement referred to below) (the “BrandCos”).
The DIP ABL Facility, among other things, is expected to provide for (i) an asset-based revolving credit facility in the amount of $270 million (the
“Tranche A DIP ABL Facility”), the initial proceeds of which will be used to refinance the Tranche A Revolving Secured Obligations (as defined in the ABL Credit Agreement referred to below), and (ii) an asset-based term loan facility in the
amount of $130 million, the proceeds of which will be used to refinance the SISO Secured Obligations (as defined in the ABL Credit Agreement). The remaining proceeds of the DIP ABL Facility are expected to be used for general corporate purposes of
the Debtors, including to pay expenses in connection with the Cases.
The maturity date of the DIP ABL Facility is expected to be the earliest of (i) 365 calendar days after the closing date of the
DIP Term Loan Facility (the “Stated Maturity Date”), with an option to extend to the earlier of 180 days after the Stated Maturity Date and the extended maturity date of the DIP Term Loan Facility following the exercise by Products Corporation
of its option to extend the maturity date thereunder; (ii) July 20, 2022, if a final order approving the DIP ABL Facility has not been entered by the Court on or before such date; (iii) the effective date of any chapter 11 plan for the reorganization
of any Debtor; (iv) the consummation of any sale or other disposition of all or substantially all of the assets of the Debtors pursuant to Bankruptcy Code §363; (v) the date of the acceleration of the DIP ABL Facility and termination of the
corresponding commitments in accordance with the definitive documents governing the DIP ABL Facility; (vi) the date the Bankruptcy Court orders the conversion of the Cases of any of the Debtors to a chapter 7 liquidation, (vii) the rejection or
termination of the BrandCo License Agreements (as defined in the BrandCo Credit Agreement) and (viii) the dismissal of the Cases of any Debtor without the consent of the holders of more than 50% of the loans and commitments under the Tranche A DIP
ABL Facility. The outstanding principal of the DIP ABL Facility will be due and payable in full on the maturity date.
The DIP ABL Facility is expected to be secured by a perfected (i) first priority priming security interest and lien on
substantially all assets of the Debtors (other than the BrandCos and Beautyge I, an exempted company incorporated in the Cayman Islands (“Beautyge I”)) constituting ABL Facility First Priority Collateral (as defined in the ABL Credit
Agreement), (ii) junior priority priming security interest and lien on substantially all assets of the Debtors (other than the BrandCos and Beautyge I) constituting Term Facility First Priority Collateral (as defined in the ABL Credit Agreement), and
(iii) security interests and liens on substantially all assets of the Debtors (other than the BrandCos and Beautyge I) that was not, on the Petition Date, subject to valid, unavoidable and perfected security interests and liens, pursuant to
Bankruptcy Code §364(c)(2), with the following priority: if such collateral is of the same nature, scope and type as (a) ABL Facility First Priority Collateral, on a first priority senior priming basis, and (b) Term Facility First Priority
Collateral, on a junior priority basis subject to the liens in favor of the DIP Term Loan Facility, the Intercompany DIP Facility and any adequate protection liens granted to certain of Products Corporation’s secured creditors (the collateral for the
DIP ABL Facility, the “Opco DIP Collateral”). The DIP ABL Facility is expected to be subject to certain customary and appropriate conditions for financings of similar type.
The DIP ABL Facility is expected to be subject to customary affirmative and negative covenants and events of default for
postpetition financing of this type, including, without limitation, customary “milestones” for progress in the Cases, including without limitation the filing of a disclosure statement to solicit votes on a plan of reorganization and the entry of an
order by the Court confirming such plan of reorganization.
The terms of the DIP ABL Facility are subject to continued negotiations between the Debtors, the lenders thereunder, and
certain of the Debtors’ prepetition creditors and parties in interest.
The DIP Term Loan Facility, among other things, is expected to provide for a term loan facility in the amount of $575 million, the proceeds of which
will be used to refinance obligations under the Foreign ABTL Credit Agreement referred to below and for general corporate purposes of the Debtors, including to pay expenses in connection with the Cases.
The maturity date of the DIP Term Loan Facility is expected to be the earliest of (i) 365 calendar days after the closing date
of the DIP Term Loan Facility, with an option to extend by up to 180 days at the option of Products Corporation; (ii) July 20, 2022, if a final order approving the DIP Term Facility has not been entered by the Court on or before such date; (iii) the
effective date of any chapter 11 plan for the reorganization of any Debtor; (iv) the consummation of any sale or other disposition of all or substantially all of the assets of the Debtors pursuant to Bankruptcy Code §363; and (v) the date of
acceleration or termination of the DIP Term Loan Facility in accordance with the definitive documents governing the DIP Term Loan Facility. The outstanding principal of the DIP Term Loan Facility will be due and payable in full on the maturity date.
The DIP Term Loan Facility is expected to be secured by a perfected (i) first priority priming security interest and lien on
the Term Facility First Priority Collateral, (ii) junior priority priming security interest and lien on the ABL Facility First Priority Collateral, and (iii) a first priority security interest and lien on substantially all the assets of the BrandCos
and Beautyge I, and (iv) security interests and liens on substantially all assets of the Debtors that was not, on the Petition Date, subject to valid, unavoidable and perfected security interests and liens, pursuant to Bankruptcy Code §364(c)(2),
with the following priority: if such collateral is of the same nature, scope and type as (a) Term Facility First Priority Collateral, on a first priority senior priming basis, and (b) ABL Facility First Priority Collateral, on a junior priority
priming basis subject to the liens in favor of the ABL DIP Facility and any adequate protection liens granted to certain of Products Corporation’s secured creditors. The DIP Term Loan Facility is expected to be subject to certain customary and
appropriate conditions for financings of similar type.
The DIP Term Loan Facility is expected to be subject to customary affirmative and negative covenants and events of default for
postpetition financing of this type, including, without limitation, customary “milestones” for progress in the Cases, including without limitation the filing of a disclosure statement to solicit votes on a plan of reorganization and the entry of an
order by the Court confirming such plan of reorganization.
The terms of the DIP Term Loan Facility are subject to continued negotiations between the Debtors, the lenders thereunder, and
certain of the Debtors’ prepetition creditors and parties in interest.
Pursuant to the Intercompany DIP Facility, it is expected that term loans would be automatically deemed to be provided by the BrandCos to Products
Corporation in the amount of, and in full satisfaction of the obligation of Products Corporation to pay, amounts payable from time to time by Products Corporation to the BrandCos under the BrandCo Licenses. The loans under the Intercompany DIP
Facility are expected to be secured by a fully perfected security interest and lien on all of the Opco DIP Collateral, immediately junior to the liens and security interests on the Opco DIP Collateral securing the DIP Term Loan Facility. The loans
under the Intercompany DIP Facility are expected to bear interest at a rate to be determined and are expected to mature on the maturity date of the DIP Term Loan Facility.
The terms of the Intercompany DIP Facility are subject to continued negotiations among the Debtors and certain of the Debtors’
prepetition creditors and parties in interest.
Foreign ABTL Credit Agreement
Pursuant to that certain First Forbearance Agreement and Second Amendment to the Credit Agreement, dated as of June 15, 2022, among the parties to
that certain Asset-Based Term Loan Credit Agreement, dated as of March 2, 2021 (as amended, modified or supplemented from time to time, the “Foreign ABTL Credit Agreement”) by and among Revlon Finance LLC, as the borrower (the “Foreign ABTL
Borrower”), the guarantors party thereto, the lenders party thereto (the “Foreign ABTL Lenders”), and Blue Torch Finance LLC (“Blue Torch”), as administrative agent and collateral agent, Blue Torch and the Foreign ABTL Lenders
have agreed, upon payment of a forbearance fee and other customary conditions, to (i) forbear from exercising remedies under the Foreign ABTL Credit Agreement as a result of certain specified defaults that will arise as a result of the filing of the
Bankruptcy Petitions and (ii) amend the Foreign ABTL Credit Agreement in certain respects as a condition to the proposed forbearance. It is anticipated that all obligations outstanding under the Foreign ABTL Credit Agreement will be repaid in full
in connection with the initial borrowing under the DIP Term Loan Facility.