Oriflame Debt Dives Amid Challenges

Oriflame Debt Dives Amid Challenges

THE WHAT?   Oriflame Holding AG’s debt is worsening, with its $550 million bonds due in 2026 falling to 26 cents on the dollar after reporting a significant drop in fourth-quarter revenue and profit, with adjusted EBITDA decreasing by 84% to €6.2 million ($6.7 million).

THE DETAILS The decline is attributed to challenges like rising inflation and the impact of the Ukraine war, particularly affecting Oriflame’s business in Russia, leading to an organizational restructuring that included a 20% workforce reduction.

THE WHY? Bondholders, concerned by the company’s financial state, are consulting with Moelis & Co. to explore their options, with some funds, including Blantyre Capital Ltd., showing interest in the distressed bonds. Oriflame plans to focus on operational transformation and repositioning in 2024 before addressing its bond maturities, and reported having €80.6 million in cash as of December 2023.