Multi-Color Corporation (MCC) has commenced a prepackaged Chapter 11 restructuring process in the United States as part of a previously announced agreement to reset its balance sheet and position the business for long-term growth.
The company has stressed that the move will not disrupt global operations, with all sites expected to continue trading as normal and all customers, suppliers and employees unaffected throughout the process.
MCC is a major global label producer with a significant footprint across Australia and New Zealand, supplying a wide range of brand owners in food, beverage, wine, spirits and consumer goods markets.
What the restructuring involves
The restructuring follows an agreement reached in late January with holders of around 72 per cent of MCC’s secured first-lien debt, alongside its private equity sponsor Clayton, Dubilier & Rice (CD&R).
Under the agreement, MCC will significantly reduce its debt, cutting net borrowings from approximately US$5.9 billion to around US$2.0 billion. Annual cash interest costs are also expected to fall sharply, from about US$475 million to US$140 million by 2026, freeing up capital for reinvestment in the business.
As part of the recapitalisation, MCC will receive close to US$890 million in new common and preferred equity, and is expected to exit the process with more than US$500 million in liquidity.
Business as usual for customers and suppliers
MCC has emphasised that the Chapter 11 filing is prepackaged, meaning it was negotiated in advance with lenders and is designed to be completed quickly.
To support uninterrupted operations, the company has secured US$250 million in debtor-in-possession (DIP) financing, subject to court approval. This funding is intended to ensure MCC can continue operating in the ordinary course of business while the restructuring is finalised.
According to the company, all trade vendors and suppliers are expected to be paid in full, employee wages and benefits will continue without interruption, and service levels to customers are not expected to change.
MCC has also filed standard “first-day” motions with the court seeking approval to maintain normal business activities, including supplier payments, employee compensation and other operational requirements.
Positioning for long-term growth
MCC says the restructuring is aimed at strengthening the company’s financial foundation and supporting future investment, rather than addressing operational performance issues.
The company expects to move through the process as quickly as possible due to strong lender support, with global operations continuing as normal throughout.