REVLON OFFERS CUT-RATE SHARES TO STAY AFLOAT\Ownership teeters on $1.1 billion payment.

Byline: Floyd Norris The New York Times

Sometimes you should take what you can get, even if it's not what you hoped for.

Ron Perelman is trying again to persuade investors to buy stock in Revlon, the cosmetics and personal care company he has been running since winning a bitterly fought takeover battle a decade ago.

His first try came in the summer of 1992. Then he wanted $18 to $20 a share, but came down to $14 without getting any takers. Reports then said he could have gotten $12, but wouldn't take it.

Revlon remained private, and Perelman has since had to come up with more cash to keep it operating.

Now, Perelman is back, seeking a price of $19 to $22 a share. But cut through the financial details and you find that these are different shares.

There has been a reverse split in the meantime. On an equivalent basis, he is seeking $8.72 to $10.10 per old share. In other words, Perelman has cut his expectations severely even as the stock market has soared. He no doubt wishes he'd taken the money back then.

Revlon is trumpeting that it has seen nine quarters of improving results, ending in - hosanna - a net profit of $3.3 million in the last three months of 1995. But operating cash flow has been a horror story for most of the last five years.

So Revlon keeps going deeper into debt, and keeps paying more in interest expense. Even when Revlon tried to use financial engineering it backfired. It is losing money on its interest-rate swaps.

Meanwhile, deadlines loom. In just over two years, Perelman must pay $1.1 billion to bondholders or lose his ownership of Revlon. It is hard to see how Revlon can come up with the cash from operations, but if this stock offering sells, and if the share price rises, then perhaps more Revlon shares could be used to pay off the bonds.

A hint on how Revlon managed to turn profitable may be seen in the bargain offered late last year to buyers of Revlon's Flex shampoo.

Suddenly a large bottle cost less than a smaller one had, and that was before using the discount coupon attached to the bottle. The company reports that its sales rose nicely in 1995 in part because of increased promotional expenditures.

The question is to what extent those sales were taken from this year, as buyers who filled their cabinets need not buy more. An answer is likely to come only after this offering has been sold.

Whether or not this offering succeeds, it looks like Revlon was a big financial mistake for Perelman, whatever the psychic benefits of running a company that employs some of the most beautiful models in the world. It made money in the first years he owned it, but since then red ink has been a regular.

There are some successful products inside Revlon, but there is no indication that the ever-rising level of debt is about to subside. A buyer of these shares is getting a highly leveraged share, one that could rise nicely if the company does well, or that could prove worthless.

Such stub stocks, as Wall Street calls them, were once popular because some had zoomed. But investors were soured by RJR-Nabisco, which went public three years after its huge leveraged buyout. Its stub is down about 40 percent since the 1991 offering.

Revlon has 11 lead underwriters, including nearly every big name on Wall Street, to sell this deal in the United States. And it has more to sell shares overseas. That's a lot of firepower to raise $150 million. But a look at the company's balance sheet makes it clear why Perelman thinks he needs so much help.