Revlon will need further amendment to credit facility

By Carlise Newman

Chicago, Aug. 13 - Revlon Inc. said its Revlon Consumer Products Corp. subsidiary will need to seek a further amendment or waiver regarding its credit agreement because it does not expect that its operating results will allow it to satisfy the covenants for the four quarters ending Dec. 31, which could result in the event of default.

The minimum EBITDA required under the credit agreement is $230 million for each of the four quarters ending on Dec. 31; March 31, 2004; June 30, 2004; and Sept. 30, 2004; and $250 million for any four consecutive fiscal quarters ending Dec. 31, 2004 and thereafter.

The leverage ratio covenant under the credit agreement will permit a maximum ratio of 1.10:1.00 for any four quarters ending on or after Dec. 31. After the most recent amendment, the credit agreement also contains a $20 million minimum liquidity covenant.

Revlon said in a filing with the Securities and Exchange Commission that it expects that Products Corp.'s bank lenders will consent to the amendment request.

If the company is unable to secure an amendment, it could be required to refinance the credit agreement, repay it with proceeds from the sale of assets or operations, or additional capital contributions or loans from MacAndrews & Forbes, the company's other affiliates and/or third parties or the sale of additional equity securities of Revlon.

If the company does not obtain an amendment or waiver and cannot repay the credit agreement, the debt could be accelerated and the company will be in default.

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