CD&R-Backed Multi-Color Receives Court Approval for Restructuring
Multi-Color Corp, a label manufacturer backed by private equity firm Clayton, Dubilier & Rice (CD&R), secured court approval on Thursday for a restructuring plan that eliminates nearly $4bn of debt and facilitates its exit from Chapter 11 bankruptcy protection, according to Private Equity Wire. US Bankruptcy Judge Michael Kaplan approved the plan, citing overwhelming support from lenders as shown in court filings.
Details of the Restructuring Plan
The approved plan allows CD&R to retain control of Multi-Color through a $454m capital injection and extends maturities on roughly $1.9bn of existing debt. It includes raising new funding through about $489m in new preferred equity and $1.56bn in new term loans and notes, with additional capital commitments from lenders. CD&R is contributing approximately $400m in preferred equity, while other lenders are providing further equity support, as detailed in court documents.
Key Parties Involved in the Deal
The restructuring received support from creditors including Apollo Capital Management, Ares Management, and Arini Capital Management, following an agreement with a dissenting lender group that included BTG Pactual Asset Management US, Canyon Capital Advisors, and Owl Creek Asset Management. This backing enabled the plan’s progression, according to the report by Bloomberg cited in Private Equity Wire.
Background and Expected Outcome
Multi-Color filed for Chapter 11 protection in January due to struggles with around $6bn in long-term debt amid weaker demand for its labeling products, a common challenge in industries affected by economic fluctuations as widely known in bankruptcy contexts. The company expects to exit bankruptcy with roughly $550m in liquidity, paving the way for its financial stabilization.
