Global label supplier Multi-Color Corporation (MCC) has received approval from the US Bankruptcy Court for the District of New Jersey for its first-day motions related to the company’s prepackaged Chapter 11 filing, clearing the way for uninterrupted operations during the restructuring process.
The approval confirms that MCC will continue to operate in the normal course of business, pay trade vendors and suppliers in full, and maintain employee wages and benefits without interruption throughout the process.
MCC filed for prepackaged Chapter 11 protection on 29 January as part of a previously announced financial restructuring designed to significantly deleverage its balance sheet and strengthen its capital structure. The company has operations worldwide, including a substantial presence in Australia and New Zealand – where it has 11 sites – supplying labels across food, beverage, wine, spirits and consumer goods markets
As part of the court’s decision, MCC has been granted immediate access to US$125 million of a US$250 million debtor-in-possession (DIP) financing facility. The funding is being provided by certain holders of the company’s secured first-lien debt, alongside its equity sponsor, Clayton, Dubilier & Rice (CD&R).
The DIP financing is intended to support MCC’s operations through the initial stages of the Chapter 11 process and ensure the company remains well capitalised while the restructuring is completed.
The court also authorised MCC to continue paying trade vendors and suppliers in full in the ordinary course of business, meet employee-related obligations, and carry out other essential operational activities required to maintain continuity across its global operations.
MCC president and chief executive officer Hassan Rmaile said the court’s approval was key to the restructuring process.
“The approval of our first-day motions marks an important milestone in our financial restructuring, which will allow us to operate in the normal course as we deleverage our balance sheet and strengthen our capital structure,” Rmaile said. “As we look ahead, we remain focused on providing best-in-class solutions for our customers and executing on our strategic priorities.”
MCC has reiterated that its restructuring is financial in nature and is not expected to impact customer service, supplier relationships or day-to-day operations across its global network, including Australia and New Zealand.
Recapitalisation plan unchanged
As previously announced, MCC entered into a restructuring support agreement backed by holders of approximately 72 per cent of its secured first-lien debt, along with CD&R.
The transaction is expected to reduce MCC’s net debt from around US$5.9 billion to approximately US$2.0 billion. It also предусматриes an US$889 million new common and preferred equity investment from CD&R and a group of existing secured lenders to support long-term growth and investment.
Upon emerging from the Chapter 11 process, MCC expects to have more than US$550 million in available liquidity.
For customers and suppliers in the ANZ market, MCC’s message remains consistent: operations continue as normal while the company completes its balance sheet reset.