Multi-Color Corporation has received approval from the competent US bankruptcy court for central applications to start its pre-bankruptcy Chapter 11 proceedings.
Multi-Color Corporation (MCC), a global provider of labelling solutions for consumer goods and brand manufacturers, has received approval from the U.S. Bankruptcy Court for the District of New Jersey for the so-called First-Day-Motions. The court confirmed that business operations will continue as normal during the restructuring proceedings and that there will be no restrictions for customers or suppliers.
This is MCC's response to the great importance of stable supply chains in the international packaging and labelling market, in which the company plays a central role for numerous branded companies. According to the company, all suppliers will continue to be paid in full, ongoing production processes will continue and customer orders will be fulfilled without interruption.
Financing ensures operational stability in the label business
As part of the court's decision, MCC received immediate access to USD 125 million from a total of USD 250 million in debtor-in-possession financing. The funds will be provided by existing secured lenders and majority owner Clayton, Dubilier & Rice and will be used to ensure liquidity and operational stability during the restructuring, according to the statement.
For customers from the food, beverage, pharmaceutical and consumer goods industries, this means planning security for label deliveries, services and development projects, according to the company. Wages, social benefits and existing contracts also remain in full force and effect.
Restructuring with effects on competitiveness
The previously announced restructuring agreement provides for a significant reduction in debt. MCC's net debt is to fall from around USD 5.9 billion to around USD 2.0 billion. In addition, an equity injection of USD 889 million from existing lenders and Clayton, Dubilier & Rice is planned.
MCC expects to have more than USD 550 million in available liquidity once the process is complete. According to the company, the aim is to strengthen its long-term competitiveness in the global labelling and packaging market and to secure investments in capacities, processes and customer solutions.
Source: MCC
