The New York-headquartered Avon Products Inc is in the process of raising money from private equity (PE) firms. Avon will hold an auction for mobilizing funds on private investment in public equity (PIPE).

The bids for auction are slated for next week. Avon is also exploring other ways of raising the money to strengthen its business operations. 

Avon Products Inc is engaged in selling cosmetics via direct marketing. The company has decided to sell some stake in the company to mobilize funds for streamlining business operations. However, the company didn't reveal the size of stake sale and how much exact amount it's going to raise.

As the bids for auction are scheduled for next week, company officials are tight-lipped on the development. Avon is valued at $2billion. 

PE firms such as Cerberus Capital Management and Platinum Equity are participating in the auction for PIPE fundraising. Avon's stock was trading in a volatile way and as a result, transactions were halted in the shares on Thursday. 

The share price shot over $5 as soon as the news on fundraising hit the market. However, the stock couldn't sustain at higher level. Avon's stock retreated in late trading to end at $4.10 registering a net loss of 9.49 percent. 

About 40mn shares were traded. It touched day's high of $5.10 and low of $4.07 during the intraday trading. The market capitalization of Avon after the Thursday trading was $2bn. 

Avon and other PE firms didn't reveal the details about the fundraising and stake sale. Avon has been making efforts to turn around its business as losses are mounting. 

The beauty-products company Avon is suffering losses in the US market. It's witnessing diminishing demand in the Brazil market. 

Few months ago, Avon was target of a bogus takeover bid. A firm called PTG Capital Partners on 14 May offered a bogus takeover bid price of three times of the then market price. The offered price was $18.75 per share.

The firm was incorporated in a remote archipelago in the Indian Ocean. However, the US Securities and Exchange Commission charged a Bulgarian man, who was responsible for fake takeover bid. 

Due to the fake regulator filing stating proposal to takeover, Avon shares surged 20 percent. The company is making every effort to pull itself out of the slump.

With declining sales, Avon is expected to post losses for the fourth quarter also. Lindsay Fox, a spokeswoman at Avon, declined to provide further information about fundraising.