Multi-Color Corp, the CD&R-backed label manufacturer, has received court approval for a restructuring plan that will eliminate nearly $4bn of debt and pave the way for its exit from Chapter 11 bankruptcy protection, according top a report by Bloomberg.
US Bankruptcy Judge Michael Kaplan approved the plan on Thursday, noting it had “overwhelming” support from lenders. The report cites court filings as showing that the agreement enables private equity sponsor Clayton, Dubilier & Rice (CD&R) to retain control of the business through a $454m capital injection.
The restructuring was also supported by creditors including Apollo Capital Management, Ares Management and Arini Capital Management, following a deal with a dissenting lender group that included BTG Pactual Asset Management US, Canyon Capital Advisors and Owl Creek Asset Management.
Under the approved plan, Multi-Color will extend maturities on roughly $1.9bn of existing debt and raise new funding through a combination of equity and debt instruments. This includes about $489 million in new preferred equity and $1.56 billion in new term loans and notes, alongside additional capital commitments from lenders.
CD&R is contributing approximately $400m in preferred equity, while other lenders are providing further equity support, according to court documents.
The company filed for Chapter 11 protection in January after struggling with around $6bn in long-term debt amid weaker demand for its labelling products. It expects to exit bankruptcy with roughly $550m in liquidity.
