Multibillionaire Ronand Perelman is on a selling spree. And he’s selling because he’s trying to lighten his portfolio. Someone who at one point was considered the richest man of America, he was at one time worth almost $20 billion, is shrinking his reach as he is getting older. Now he’s selling some of his more personal possessions.
Previously Mr. Perelman has sold his stake in AM General, the company that makes Humvees for military use worldwide, has sold a flavorings company, and has hired a team of bankers and investors to headhunt for positions in other companies he owns and manages. Now he is selling millions of dollars’ worth of art from his collections and a yacht that is registered at 257 feet long.
But why is someone worth so much and been so successful suddenly turning around and dumping assets into the open market? Well with his age slowing him down his net worth has also slowed down dropping to around $4 billion. Meanwhile Mr. Perelman will begin to appreciate the finer things in life like the comforts of family and home. He is motivated into spending more time with his current wife and their two children.
Some, however, are thinking about the practical applications of this asset liquidation. Mr. Perelman allegedly has a lot of outstanding debt that could cause some minor disruptions to his portfolio and reputation globally with Citigroup, Bank of America, UBS, and Citigroup. While the amount of those loans is undisclosed the ability to repay them may affect those banks futures. However, a spokesman for Mr. Perelman said that was not the case and that a cash shortage would not be the reason for this sale.
Mr. Perelman gained his fortune from the junk bond takeover era from Michael Milkin back in the 1970s and 1980s and grew through reinvestment and good choices in his past but some of his investments are not as strong, especially with the ongoing coronavirus pandemic, for example Mr. Perelman owns cosmetic company Revlon back in 1985 for $1.74 billion but is now only worth $365 million and is holding over $3 billion in debt, making its debt to equity ratio of -2.35, a measure that is not strong and puts the entire company in an unstable situation. This is not an indictment of Mr. Perelman exactly as other cosmetic companies competing with Revlon are in similar situations but this sale of assets may be used to prop up investments like this.