Files for RJ at Avon Products USA, a Natura&Co subsidiary

Avon Products Inc. (API), a subsidiary of Natura &Co (NTCO3), filed for Chapter 11 in the US, similar to the Brazilian judicial recovery. Natura & Co is the company’s largest lender and will lend USD 43 million under the DIP mechanism to guarantee the holding company’s continuity during the process. Also, the Brazilian company will offer US$125 million through a judicial court-supervised bidding process to continue the US holding company’s operations outside the United States.

With the Chapter 11 process, the company makes the assets available for sale at this auction. Thus, Natura will bid to continue operating in Asia, Europe and Africa. For this offer, Natura & Co intends to use some of its existing credits against the API.

In the acquisition of Avon, which was announced in 2019 and completed in 2020, API was one of the companies acquired. This holding no longer has operations, but debts and liabilities now encourage a security claim against creditors.

The company does not disclose how much debt the company has, the total liabilities of the subsidiary. According to the company, “The process is limited to API, the non-operating holding company of the Avon brand and other non-operating US subsidiaries. No impact is expected on Avon brand operations outside the US, which are not part of this transaction, including operations in Latin American countries where the Avon brand is distributed by Natura and the integration of the two brands continues to deliver consistent results.

Along with the API Chapter 11 filing, strategic studies announced by Natura &Co in February 2024 to separate Avon and Natura have been suspended pending completion of the process.