MCC enters into restructuring support agreement

Multi-Color Corporation (MCC) has entered into a restructuring support agreement (the RSA) with holders of approximately 70 percent of MCC’s secured first lien debt and its equity sponsor, CD&R, on the terms of a comprehensive financial restructuring.

The transactions contemplated by the RSA will significantly deleverage MCC’s balance sheet, reducing its net debt load from approximately 5.9 billion USD to approximately 2 billion USD. The company’s annualized cash interest will also be reduced from approximately 475 million USD to 140 million USD in 2026, a reduction of over 330 million USD, with long-term debt maturities extended to 2033 following consummation of the restructuring transactions.

To implement the transactions contemplated by the RSA, MCC has launched a solicitation for votes in support of a prepackaged plan of reorganization, which is currently supported by holders of approximately 70 percent of MCC’s secured first lien debt and CD&R. The RSA provides for an 889 million USD new common and preferred equity investment that will support long-term growth and investment. Upon emergence, MCC will have more than 500 million USD of liquidity.

'Over the past two years, we have taken decisive actions commercially and operationally, while onboarding top-notch leadership talent, to best position MCC for sustainable, profitable growth,' said Hassan Rmaile, president and CEO of MCC. 'Our operational initiatives are showing momentum, and optimizing our capital structure is an essential step to advance our growth strategy. This agreement, which reflects a strong vote of confidence by MCC’s sponsor and lenders, will create a stronger financial foundation, enabling us to enhance the innovative and high-quality label solutions that help brands connect with consumers, enhance product integrity, and drive sustainable impact. We are grateful for CD&R’s and our lenders’ support as well as the ongoing dedication of our employees, customers, and suppliers.'

The RSA also provides for 250 million USD of new money debtor-in-possession (DIP) financing to capitalize the business throughout the Chapter 11 process. This additional financing, when approved, is expected to allow MCC to continue operating in the ordinary course during the restructuring without impacting trade creditors, customers, employees, vendors or suppliers, and will allow the company to honor its commitments to strategic partners.

Upon commencement of the prepackaged Chapter 11 proceedings, MCC will file a series of first day motions that, subject to court approval, will allow the company to continue to operate in the ordinary course of business while it works to deleverage its capital structure. In addition to seeking approvals related to the DIP financing, MCC will seek authority to allow the company to continue to maintain wages and benefits without interruption, satisfy employee-related claims, pay vendors in the ordinary course and perform other critical functions and processes necessary for the Company to continue uninterrupted operations.