XML 39 R26.htm IDEA: XBRL DOCUMENT v3.22.2.2
SUBSEQUENT EVENTS
 9 Months Ended
Sep. 30, 2022
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS SUBSEQUENT EVENTSOn November 3, 2022, the board of directors of Avon Products, Inc. (“Avon”) approved a plan to relocate its research and development facilities to Brazil and Poland, two of its largest markets, by the end of its fiscal quarter ending June 30, 2024, in
order to further deliver its Global Innovation Program and realize cost efficiencies. As a result, Avon will close its research and development facility in Suffern, New York. The closure of the Suffern facility is expected to be completed by the end of Avon’s fiscal quarter ending June 30, 2024.
Avon is currently assessing the costs associated with the closure of its research and development facility in Suffern and the relocation of research and development activities to Brazil and Poland. Avon expects to incur non-recurring restructuring costs in connection with the closure and relocation in the amount of approximately $39 million, to be incurred in the fiscal years ending December 31, 2022, 2023, 2024 and 2025 and capital expenditures relating to the infrastructure and facilities in Brazil and Poland totaling approximately $10 million, to be incurred in the fiscal years ending December 31, 2022 and 2023, amounts of which will be compensated with a reduction in recurring costs as a result of the restructuring. Avon is also performing an impairment analysis over fixed assets and, as a result, expects to record a potential impairment charge in the range of $35.0 million to $40.0 million.
The restructuring costs and impairment charges described above are preliminary estimates and actual amounts may be materially different from these estimates. Avon may also incur additional charges, non-cash costs, future cash expenditures or impairments not currently contemplated due to events that may occur as a result of, or that are associated with, the Suffern facility closure and the relocation of its research and development facilities to Brazil and Poland.
On November 7, 2022, the Company’s subsidiary, Avon Cosmetics Limited entered into a two-year committed intercompany multi-currency revolving credit facility with Natura &Co Luxembourg Holdings S.à r.l, a subsidiary of Natura &Co Holding and an affiliate of the Company, in the amount of $300. Borrowings under this facility will be used to reduce short-term financing from third-party banks and will bear interest at a rate per annum of 3% plus applicable currency benchmark rate.