Avon files for Chapter 11 bankruptcy
Natura said Avon Products (API), a non-operating US-based holding company it bought in 2020 as part of its acquisition of Avon, has filed for Chapter 11 bankruptcy protection to deal with high debt. Natura &Co is Avon Products’ largest creditor and supports the move, committing to $43 million in debtor-in-possession financing and a $125 million offer to buy Avon’s non-US operations.
The Avon Products move led Natura &Co to post a net loss of 859 million reais in the second quarter, wider than the loss of 732 million reais a year earlier, mainly due to write-downs.
Analysts at JP Morgan said Natura &Co continued to show a good track record of delivering the expected results from the Avon integration in Latin America, but that results were still tainted by many non-recurring items and by Avon International.
“In this noisy environment, we expect a positive share price reaction to the better-than-expected LatAm results.”
