Multi-Color Corporation (MCC) has announced that to implement the previously announced restructuring support agreement (RSA), the company has commenced its prepackaged Chapter 11 filing in the United States Bankruptcy Court for the District of New Jersey.

MCC announced on January 27 it had entered into the RSA with holders of approximately 72% in amount 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 to approximately $2.0 billion. 

The company’s annualized cash interest will also be reduced from approximately $475 million to $140 million in 2026, a reduction of over $330 million, with long-term debt maturities extended to 2033 following consummation of the restructuring transactions. Additionally, the RSA provides for an $889 million new common and preferred equity investment that will support long-term growth and investment. Upon emergence, MCC will have more than $500 million of liquidity.

Business as Usual

The RSA also provides for $250 million of new money debtor-in-possession (DIP) financing to capitalize the business throughout the prepackaged Chapter 11 process. Subject to the court’s approval, this additional financing 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.  

MCC has filed a series of customary “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 trade vendors and suppliers in full in the ordinary course, and perform other critical functions and processes necessary for the Company to continue uninterrupted operations.