Natura will issue bonds to deleverage after The Body Shop acquisition
Natura wants a swift return to financial stability. The company, which took on a heavy debt burden to finance the purchase of The Body Shop, has announced it will issue securities on the international capital market for a value of $1.150 billion.
The decision was approved by Natura's board of directors at its 18th January meeting, and was communicated officially to the Brazilian authorities. The funds raised through the bond issue will be allocated to repaying part of the debt which Natura incurred in to finance the British cosmetics chain's purchase.
The Brazilian cosmetics manufacturer's Executive President, João Paulo Ferreira, stated last November that the group intends to expedite the process of deleveraging after its acquisition of The Body Shop, and the bond issue will be a first step in that direction.
Natura's intention is to be able to gradually reduce debt to its level prior to The Body Shop operation, and to do so before 2022. According to information provided by Natura itself, the ratio of net debt to EBITDA at the end of September 2017 was 3.52, compared to 1.47 in September 2016. By the end of the current fiscal year, the Brazilian group estimates that the ratio will be 3.6.
Last summer, Natura purchased British cosmetics retailer The Body Shop from L'Oréal for €1 billion. The Body Shop is present in more than 60 countries, and in 2016 it generated net sales for €921 million.
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