Avon Products Inc. said Tuesday that Cerberus Capital Management LP has agreed to invest $435 million in its convertible perpetual preferred stock as part of a new strategic partnership. Avon will separate its North America business into a privately-held company that will be majority owned and managed by Cerberus. The private-equity firm will invest $170 million in the new entity and hold an 80% stake. "The partnership, along with other actions we are taking, also further increases our financial flexibility," Avon Chief Executive Sheri McCoy said in a statement. "We have significant capital resources and liquidity with which to fund working capital, restructuring costs, and opportunistic debt retirement." Avon has $1 billion in cash including the proceeds from the two transactions, she said. Avon shares were trading down 3% in afternoon trade, while the S&P 500 was up 2%.
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