MCC enters restructuring support agreement to cut debt and strengthen balance sheet

USA – Multi-Color Corporation (MCC) has entered into a restructuring support agreement (RSA) with holders of approximately 70% of its secured first lien debt and its equity sponsor, Clayton, Dubilier & Rice (CD&R).

The agreement sets out the terms of a comprehensive financial restructuring aimed at significantly strengthening the company’s capital structure.

Under the transactions contemplated by the RSA, MCC’s net debt is expected to be reduced from about US$5.9 billion to approximately US$2 billion.

The restructuring will also sharply lower the company’s annualized cash interest expense by more than US$330 million, from around US$475 million to approximately US$140 million in 2026.

In addition, long-term debt maturities will be extended to 2033 following completion of the restructuring.

To implement the agreement, MCC has launched a solicitation seeking votes in support of a prepackaged plan of reorganization.

The plan is currently backed by holders of roughly 70% of the company’s secured first lien debt, alongside CD&R.

The RSA includes a US$889 million investment in new common and preferred equity, which the company says will provide a platform for long-term growth and continued investment.

Upon emergence from the restructuring, MCC expects to have more than US$500 million in liquidity.

Commenting on the agreement, Hassan Rmaile, president and CEO of MCC, said the company has made significant commercial and operational progress over the past two years.

“We have taken decisive actions commercially and operationally, while onboarding top-notch leadership talent, to best position MCC for sustainable, profitable growth,” he said.

“Our operational initiatives are showing momentum, and optimizing our capital structure is an essential step to advance our growth strategy.”

Rmaile added that the agreement reflects strong confidence from MCC’s sponsor and lenders. “This will create a stronger financial foundation, enabling us to enhance the innovative and high-quality label solutions that help brands connect with consumers, enhance product integrity, and drive sustainable impact,” he said, while thanking employees, customers, suppliers, CD&R, and lenders for their continued support.

As part of the restructuring process, the RSA also provides for US$250 million in new debtor-in-possession (DIP) financing.

Subject to court approval, this financing is expected to fully capitalize the business during the Chapter 11 process and allow MCC to continue operating in the ordinary course without disruption to trade creditors, customers, employees, vendors, or suppliers.

Upon commencing the prepackaged Chapter 11 proceedings, MCC plans to file a series of first-day motions seeking court approval to maintain normal business operations.

These include requests to continue paying wages and benefits without interruption, satisfy employee-related claims, pay vendors in the ordinary course, and ensure uninterrupted operations throughout the restructuring period.

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