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Irish Independent
20-05-2025
- Business
- Irish Independent
Ardagh quits debt talks after lenders push for bigger equity stake
Under a plan first outlined in March, a group of unsecured bondholders were expected to take over Ardagh's glass-packaging operations in exchange for a write-down on what they are owned. They'd also receive $784m of preferred equity. The creditors were to provide fresh financing and crucially get a stake in Ardagh's metal-packaging arm, which is listed in the US and produces cans for the drinks industry. The US stock market listed shares own 24pc of the cans side of the business. Under the terms that had been under discussion between Ardagh and the lenders since March the remaining 76pc stake in the cans unit would be divided 80:20 between Paul Coulson and the unsecured bondholders. However, on May 18th s a modified proposal from the senior unsecured Ardagh bondholders pushed changes including for a 60:40 split of the canning business stake. Ardagh on Tuesday said Paul Coulson, as majority shareholder, had rejected that proposal. "The parties were unable to reach an agreement and have concluded negotiations at this time. The company remains committed to putting in place a sustainable capital structure. The company will continue to review its options and may continue discussions with its financial stakeholders in the future relating to its capital structure and its applicable debt maturities,' Ardagh said. The restructuring negotiations involve Coulson and Ardagh, a lender group dubbed the SUN bondholders who own most the Ardagh's Senior Unsecured Notes plus some Senior Secured Notes and a second lender group dubbed the SNN bondholders who own a majority of Ardagh's higher ranked Senior Secured Notes plus some unsecured notes. Rejection by Ardagh of the SUN group's latest demands is likely to see the firm shift focus to trying to cut an alternative deal with the better secured SNN lender group who'd have been largely unaffected by the proposed deal with the Sun group, with their debt to be reinstated in part into new debt instead of riskier equity. While a debt deal is widely seen as necessary to address the scale of Ardagh's borrowings a hard deadline to concentrate minds is likely to be some way off, with no major debt repayments falling due until August 2026. Ardagh Group had cash and available liquidity at March 31, 2025, of over $1.1bn. The debt talks have no impact on day to day operations at any of the group's operations. The group had $10.6bn (€9.7bn) of consolidated debt as of end of last year, although only part of it was subject to the restructuring. The March deal from the unsecured bondholders' group had the support in principle of Paul Coulson and looked to be moving towards a consensual restructuring transaction. The group of unsecured creditors is being advised by PJT Partners Inc and Akin Gump Strauss Hauer & Feld LLP. The secured creditors are working with Perella Weinberg Partners and Gibson, Dunn & Crutcher LLP.
Irish Times
20-05-2025
- Business
- Irish Times
Ardagh talks with creditor group break down over improving cans unit
Ardagh Group's debt restructuring talks to a group of bondholders has broken down amid a standoff over how much Paul Coulson , the packaging giant's leading shareholder, will continue to own in its improving drink cans business. The heavily-indebted business proposed in March that a group of senior unsecured bondholders write off much of the $2.32 billion (€2.05 billion) they are owed in exchange for taking full ownership of the glass containers part of the business. The plan also envisaged Ardagh Group spinning its shares in its beverage cans unit, Ardagh Metal Packaging (AMP), into a new company (NewCo). This would be 80 per cent owned by Mr Coulson and other existing Ardagh Group shareholders – with the unsecured creditors receiving the remaining 20 per cent. However, the unsecured creditors issued a proposal on Sunday that would see them take 40 per cent, rather than 20 per cent, of AMP, which has seen is prospects improve in recent quarters even as the glass containers arm of the group continues to grapple with weak demand. READ MORE There is also disagreement over the ultimate value of AMP. 'The parties have not reached an agreement and are no longer in discussions,' said Ardagh Group in a statement on Tuesday. [ Ardagh cans unit 'turns corner' amid Coulson bid to keep control Opens in new window ] 'The company remains committed to putting in place a sustainable capital structure. The company will continue to review its options and may continue discussions with its stakeholders in the future relating to its capital structure and its applicable debt maturities.' Ardagh Group, which Mr Coulson built into one of the world's largest packaging companies through a series of debt-fuelled acquisitions over the past 25 years, said more than a year ago that it was considering options to lower its $12.5 billion debt pile. The burden had become increasingly unsustainable in recent years amid weaker-than-expected earnings. Talks with the senior unsecured creditors would have become more complicated when Ardagh Group said last month that the beverage cans unit had turned a corner', helped by a rebound in activity across the energy drinks, sparking water and health and wellness categories. 'I've entrepreneurial spirit in my veins' – Apprentice star Jordan Dargan Listen | 44:45 The group's 76 per cent-owned AMP unit, which is listed on the New York Stock Exchange, reported its revenues grew by 11 per cent year-on-year in the first quarter to $1.27 billion and upgraded its full-year earnings forecast. However, Ardagh Group's legacy glass business saw its revenues drop 6.7 per cent to $961 million during the quarter as this arm of the group continued to struggle. It is expected that the focus now switch to Ardagh Group's parallel discussion with senior secured creditors, who currently stand to be made whole under the group's debt-restructuring proposal. Progress towards an agreement at this level may lead to reengagement between the senior unsecured bondholders. Meanwhile, holders of some $1.8 billion of risky bonds issued by a holding company above the operating Ardagh Group are expected to lose almost all of what they are owed. These bonds are currently trading at about 4 per cent of their original value, according to Bloomberg data. Mr Coulson controls Ardagh Group through an 18.8 per cent direct stake in its ultimate parent company and a 52.4 per cent interest in a vehicle called Yeoman Capital, which owns 33.9 per cent of the group. He effectively owns 36.6 per cent of the equity in a business that traces its roots to the Irish Glass Bottle Company, founded in Dublin in 1932. The group also has a 42 per cent stake in a food cans business, called Trivium Packaging.
Irish Times
24-04-2025
- Business
- Irish Times
Ardagh cans unit ‘turns corner' amid Coulson bid to keep control
Ardagh Group said on Thursday that the outlook for its beverage cans unit is improving, as the group's main shareholder, Paul Coulson, vies to keep control of this part of his packaging empire even as he prepares to hand its troubled glass business over to creditors. The group's 76 per cent-owned Ardagh Metal Packaging (AMP) unit reported its revenues grew by 11 per cent year-on-year in the first quarter to $1.27 billion (€1.12 billion), driven by a 6 per cent increase in sales volumes. Earnings also rose. AMP chief executive Oliver Graham upgraded the subsidiary's sales and earnings guidance for the year, saying he now expects sales volumes to rise 3-4 per cent and earnings before interest, tax, depreciation and amortisation (Ebitda) to reach $695 million to $720 million, compared to $672 million for 2024. It previously targeted shipment growth of 2-3 per cent and Ebitda in the range of $675 million to $695 million. READ MORE Mr Graham said the drinks cans industry looks like it has 'turned a corner', helped by a rebound in activity across the energy drinks, sparking water and health and wellness categories. He said that a sector slowdown last year suggests that there was 'a breather after big growth in previous years'. Shares in AMP rallied as much as 26 per cent in early trading on Thursday on Wall Street. However, Ardagh Group's legacy glass business saw its revenues drop 6.7 per cent to $961 million during the quarter as this arm of the group continued to struggle. The trading update came as the Ardagh Group continues talks with bondholders on restructuring its estimated $12.5 billion debt mountain. The group's current proposal would see a group of senior unsecured bondholders write off much of the $2.32 billion they are owed in exchange for taking full ownership of the glass business. The plan also envisages Ardagh spinning its shares in AMP into a new company (NewCo). This would be 80 per cent owned by Mr Coulson and other existing shareholders – with the unsecured creditors receiving the remaining 20 per cent. Two hedge funds moved in March, within days of the plan being outlined, to sue Ardagh Group and its controlling shareholder, Paul Coulson, alleging that a restructuring plan for the company's debt would amount to fraud, designed to 'siphon value away' from certain bondholders in favour of the businessman and other insiders. The hedge funds, London-based Arini and Los Angeles-headquartered Canyon Partners, own more than 30 per cent of Ardagh's £400 million (€468 million) of unsecured bonds that are due to fall due in July 2027. 'The company strongly believes that the complaint is without merit and intends to vigorously defend against the proceedings,' Ardagh Group said in its first-quarter report on Thursday. Mr Coulson controls Ardagh through an 18.8 per cent direct stake in its ultimate parent company and a 52.4 per cent interest in a vehicle called Yeoman Capital, which owns 33.9 per cent of the group. He effectively owns 36.6 per cent of the equity in a business that traces its roots to the Irish Glass Bottle Company, founded in Dublin in 1932. Meanwhile, holders of some $1.8 billion of risky bonds issued by a holding company above the operating Ardagh Group are expected to lose almost all of what they are owed. These bonds were recently trading at about 5 per cent of their original value. AMP and Ardagh Group executives signalled on Thursday that they expected neither arm of the business to be materially directly affected by tariffs – even as it remains unclear how they would affect consumer demand.
