Label group Multi-Color Corporation (MCC) has initiated a prepackaged Chapter 11 filing at the US Bankruptcy Court in New Jersey, days after announcing a Restructuring Support Agreement (RSA) that it hopes will eliminate around $3.9 billion of outstanding funded debt.

Additional benefits hoped to accrue include reducing more than $330 million of cash interest expense in 2026 and extending long-term debt maturities to 2033. MCC said the RSA is supported by “more than a supermajority of senior secured lenders who have agreed to a backstop of nearly $890 million investment”.

In announcing these measures – designed to position the company for long term growth and investment – MCC said it was “business as usual”, claiming all global operations and services to customers would continue without interruption, with “all trade vendors and suppliers expected to be paid in full”.  It hopes to maintain employee wages and benefits without interruption.

“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,” said Hassan Rmaile, president and CEO of MCC, when the RSA was announced on 27 January.

“Our operational initiatives are showing momentum, and optimising our capital structure is an essential step to advance our growth strategy. This agreement, which reflects a strong vote of confidence by MCC’s sponsor and lenders, 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.”

Filing for Chapter 11 begins a legal process that is intended to enable the business to reorganise debts while remaining in operation. A series of “first day motions” filed by MCC would, if the Court approves, allow it to operate normally while it works to “deleverage its capital structure”.

Under the RSA announced, MCC’s net debt load would reduce from $5.9 billion to approximately $2 billion. The RSA provides for $250 million of new money “debtor-in-possession” (DIP) financing. Upon emergence from the process, the company says it will have more than $500 million of liquidity.