👉 Background: So, Revlon is a multinational cosmetics, skincare and fragrance company that was founded 90 years ago. Revlon set up its Aussie division in 1956 and has brought us goodies from celebs like Britney Spears, Jen Aniston and Mariah Carey!

👉  What happened: Revlon juuust survived bankruptcy in 2020, after restructuring a whole heap of its debts. But now, those debts have come back to bite, and the company's future is hanging in the balance.

👉 What else: Even though Revlon Australia generated $4 million in net profits last year, Revlon OG might look to flog it off to pay those debts down.

What's the key learning?

💡A subsidiary is a company that's owned by a parent company, but operates as a separate entity.

💡There are a number of reasons why large companies set up parent/subsidiary structures, like:

• To allow the subsidiary to pursue new business operations without risk to the parent company
• Some tax advantages
• To limit the the liabilities of one company if the other fails.

💡 When a parent company enters bankruptcy, it could sell stock in a subsidiary company to raise cash to pay off its debts. It's happened before - Steinhoff International sold all its Aussie assets (think: Freedom Furniture, Plush) to pay off its overseas debts.

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