(Bloomberg) -- Oriflame Holding AG’s debt is sliding further into distressed territory after the cosmetics seller reported a drop in revenue and profit, with some bondholders consulting investment bank Moelis & Co. to assess their options.

Its $550 million notes due in 2026 lost nearly 3 cents on the dollar to 26 cents by 3 p.m. London time, according to pricing compiled by Bloomberg. Oriflame, which sells beauty and personal care products directly to consumers online, on Wednesday posted adjusted Ebitda of €6.2 million ($6.7 million) for the fourth quarter, an 84% drop from the previous year.

The weaker performance comes as Oriflame has been struggling with rising inflation and the impact of the war in Ukraine, due to the company’s exposure to the Russian market. It also had to undergo an organizational restructuring involving 20% of the workforce. 

As a consequence, Oriflame’s notes have been losing ground and are now trading at about a quarter of their face value. Funds with a focus on special situations have been scooping up the securities as their price dropped. Some of them, including Blantyre Capital Ltd., have engaged with investment bank Moelis to assess their options, said people familiar with the matter, who spoke to Bloomberg on the condition of anonymity.

Oriflame did not respond to requests for comment, while representatives for Moelis and Blantyre declined to comment.

Oriflame will remain focused in 2024 on “the operational transformation and repositioning of the business” before beginning to address its bond maturities, its management said in a presentation to investors on Wednesday. Oriflame had €80.6 million of cash on its balance sheet as of December 2023. 

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