Restructuring: Multi-Color Corporation To Reduce Debt, Strengthen Balance Sheet

KUALA LUMPUR, Jan 28 (Bernama) -- Multi-Color Corporation (MCC), a global leader in prime label solutions, has entered into a restructuring support agreement (RSA) with holders of approximately 70 per cent of its secured first-lien debt and its equity sponsor, Clayton, Dubilier & Rice (CD&R), as part of a comprehensive financial restructuring.

The transactions under the RSA are expected to significantly deleverage MCC’s balance sheet, reducing net debt to about US$2.0 billion from roughly US$5.9 billion, according to a company statement. (US$1=RM3.94)

The company’s annualised cash interest expense is expected to fall to about US$140 million in 2026 from approximately US$475 million, while long-term debt maturities will be extended to 2033 following completion of the restructuring.

MCC President and Chief Executive Officer, Hassan Rmaile said the agreement reflects strong support from the company’s sponsor and lenders and will strengthen MCC’s financial foundation to support sustainable growth.

The RSA provides for an US$889 million new common and preferred equity investment to support long-term growth and investment. Upon emergence, MCC is expected to have more than US$500 million of liquidity.

To implement the restructuring, MCC has launched a solicitation for votes on a prepackaged plan of reorganisation, which is supported by holders of approximately 70 per cent of its secured first-lien debt and CD&R.

The RSA also provides for US$250 million of new money debtor-in-possession financing to capitalise the business throughout the Chapter 11 process, which is expected to allow MCC to continue operating in the ordinary course during the restructuring.

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.

-- BERNAMA