One of the largest label printing groups in the world has filed for Chapter 11 bankruptcy protection in the US.
MCC says it will use the period to restructure its debts, something that already has broad support among creditors. The terms for a comprehensive financial restoring have been agreed by holders of 72% of the first lien debt and by CD&R, its private equity investor. They will together provide $889 million through common and preferred equity, leaving the business with $500 million of liquidity at the end of the process. Its leveraged debt will fall from $5.9 billion to around $2.0 billion and interest payments will drop from $475 million a year to $140 million.
The company says that because it has lender support it will be able to work “as expeditiously as possible” to emerge from the process. The speed will also keep the business together and all operations will continue as usual during the process with no expected impact on customers.
There will be sufficient funding to continue to pay suppliers during the process and beyond. “We expect all trade vendors and suppliers will be paid in full,” the company states. Likewise there should be no disruption to pay and employment for its 12,275 staff.
The business has expanded rapidly though acquisition, adding ten companies in the last four years when it has been backed by private equity money. CD&R has also backed other print related businesses including American Greetings and Veritiv.
MCC operates 100 production sites across the world including the former John Watson business in Glasgow acquired in 2013. There are also plants in Cardiff and Daventry and until a year ago, a plant in Cwmbran which was closed in February.
MCC is among the international label groups that have been expanded through consolidation in recent years. CCL is the largest and best established with 213 plants in 42 countries including Ashford, Castleford, Kings Lynn, Belfast and East Kilbride in the UK.
All4Labels has grown from a European base to operate 50 sites across the world with Olympus, Springfield and PrintLeeds among the UK operations. It has been backed by private equity since 2019.
Asteria has built a network of 35 companies in ten European countries with CS Labels, ProPrint and Berkshire Labels among its UK operations.
