CVC Capital Partners is pumping €210mn into Lipton, the tea business it acquired from Unilever for €4.5bn, as the company battles a deteriorating debt situation. Lipton's €1.575bn loan has collapsed to 71 cents on the euro from 95 cents last year, with investors demanding a 19% yield. The €3.2bn debt pile has become unsustainable amid high inflation and rising interest rates.

Annual revenues have plummeted from €2bn before the separation to €1.57bn in 2024, with first-half 2025 figures showing a 13% decline to nearly €700mn. Tea consumption is waning in the UK as younger consumers shift to coffee, while growth in markets like the US and China focuses on herbal and functional teas rather than traditional black tea.

S&P warned that Lipton could face liquidity shortfall or restructuring within 12-18 months. CVC has appointed former Mars CEO Grant Reid as chairman and will present a turnaround strategy at a bondholder meeting. Multiple restructuring advisers have had Lipton on their watch list for over a year, with one partner calling the capital structure "way too levered for the product it sells."