Multi-Color Corporation Begins Prepackaged Process To Restructure Balance Sheet

KUALA LUMPUR, Jan 29 (Bernama) -- Multi-Color Corporation (MCC) has commenced its prepackaged Chapter 11 process in the United States Bankruptcy Court for the District of New Jersey to implement a previously announced restructuring support agreement (RSA) aimed at resetting its balance sheet and positioning the company for long-term growth and investment.

According to a statement, MCC entered into the RSA on Jan 27 with holders of about 72 per cent of its secured first lien debt and its equity sponsor, CD&R.

The restructuring is expected to reduce the company’s net debt from approximately US$5.9 billion to US$2.0 billion and cut annualised cash interest from roughly US$475 million to US$140 million in 2026, while extending long-term debt maturities to 2033. (US$1=RM3.91)

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The RSA also includes an US$889 million new common and preferred equity investment to support growth, giving MCC more than US$500 million in liquidity upon emergence.

Additionally, the company has secured US$250 million in new money debtor-in-possession (DIP) financing to capitalise the business and the financing is expected to allow MCC to continue operating in the ordinary course during the Chapter 11 process.

MCC has filed a series of customary “first day motions” that, subject to court approval, allow the company to continue to operate in the ordinary course of business while it works to deleverage its capital structure.

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In addition to seeking approvals related to the DIP financing, MCC will also seek authority allowing the company to maintain wages and benefits without interruption, satisfy employee-related claims, pay trade vendors and suppliers in full in the ordinary course, while performing other critical functions and processes necessary to avoid operations interrupted.

-- BERNAMA