Avon Products, Inc has initiated voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware to address its debt and legacy talc liabilities.
API has not sold products in the US since it divested its North America business in 2016, but remains the holding company of the brand's non-US operating entities.
Avon's operating businesses outside the US, which continue to advance on strategic initiatives, are not part of the Chapter 11 proceedings, and it is business as usual in Avon's international markets.
Brazil-based Natura &Co, which acquired Avon in 2020, has entered into an agreement to purchase the equity interests in Avon's non-US operations for $125 million in the form of a credit bid, subject to a Court-supervised auction process.
Natura &Co has committed up to $43 million in debtor-in-possession financing that, subject to Court approval, will provide sufficient liquidity to fund API's obligations during the sale process.
John Dubel, API's chairperson, said, "Today's action and the proposed sale of Avon's non-US operations will maximize the value of our assets and enable us to address our obligations in an orderly manner."
Kristof Neirynck, chief executive officer of Avon, said: "We remain focused on advancing our business strategy internationally, including modernising our direct selling model and reigniting the brand to accelerate growth.
"Since becoming CEO earlier this year, I am increasingly energised by our strengths and opportunities, supported by our valued Associates and nearly 2 million representatives around the world."
The Avon Company, which is the Avon brand in the US currently owned by LG Household & Health Care Ltd., is not affiliated with any other Avon entity and is not part of the Chapter 11 proceedings.
Avon Products begins bankruptcy proceedings
