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Irish Times
20 hours ago
- Business
- Irish Times
Paul Coulson: The high-wire financier who cut his teeth restructuring the Trinity Ball
Financier Paul Coulson built Ardagh Group into a big force in glass and metal packaging by being one of the most nimble Irish movers in high finance over the past 25 years – funding well-timed acquisitions with even better-timed forays into the high-cost global junk bond markets. At its peak, Ardagh Group had a market valuation of $6.7 billion (€5.8 billion) four years ago, before it was delisted from the New York Stock Exchange. That put Coulson's indirect 36 per cent stake at $2.4 billion. Yet Coulson's high-wire financing would ultimately catch up with him. The total $12.5 billion of borrowings Ardagh Group was ultimately left carrying became too much to bear as it grappled in recent years with inflation, soaring interest rates and soft consumer demand on both sides of the Atlantic. It led to a major restructuring – unveiled on Monday after months of tough negotiations with various classes of creditors – that will see a bunch off bondholders take control of the group in a debt-for-equity swap. [ Paul Coulson faces last stand in battle to retain control of Ardagh Opens in new window ] Coulson, former and current managers and a small group of investors – believed to run into hundreds – who stayed with the company for more than two decades, after its previous life on the Dublin stock market, will share $300 million (€249 million) of go-away money. It may be hard to feel sorry for them. It is understood that Ardagh Group's soon-to-be former shareholders will have shared in excess of $2 billion over the years by the time they exit – between debt-fuelled dividends and share buybacks, a windfall from the sale of the leasehold on its original base in Dublin 's Ringsend just before the 2008 property crash, and the $300 million pay-off. Coulson, known to friends as the Cooler from his university days, has been the main beneficiary. The businessman cut his teeth in the world of commerce by restructuring the finances of the Trinity Ball in the early 1970s while at college. The Dubliner started his career as an accountant with Craig Gardner (now part of PwC) in London. In 1982 he set up Yeoman International, an aircraft leasing and investment firm, where he executed a deal six years later that he would regret. After Yeoman International forked out £93 million sterling for CLF Holdings, a British leasing company to small businesses, it quickly became apparent that it had bought a dud. Bad debts in a unit of the company soared as the UK economy soured. Coulson turned on his advisers on the deal, merchant bank SG Warburg. He sued the bank and secured an out-of-court settlement of £35 million. In targeting a business more than six times the size of Ardagh by value, Coulson set the funding template for what would underpin billions of euro of subsequent deals: leverage Soon after, the Irish Glass Bottle Company, which traced its roots to 1932, was in his sights. He bought an initial stake and took over as chairman in 1998. Within a year he started off on a road to transform the sleepy company – by then renamed Ardagh Plc – with a single glass plant in Dublin and its two furnaces through the acquisition of Rockware, then Britain's largest glass bottle maker, for £247 million. In targeting a business more than six times the size of Ardagh by value, Coulson set the funding template for what would underpin billions of euro of subsequent deals: leverage. Some 375 workers at the Irish Glass Bottle plant lost their jobs when Coulson closed the facility in 2002. The following year, he engineered a deal that would split the group in two. Ardagh Glass, a company he subsequently used to build his glass and drink cans empire, was taken private. The other, South Wharf, remained listed, with one major asset: the leasehold on the 24-acre glass bottle site in Dublin. South Wharf and its shareholders went on to share two-thirds of the €411 million proceeds from the sale of the site as the property boom neared its peak, in 2006. Almost two decades later, the site is finally under construction. Ardagh Group's largest deal was its $3.4 billion purchase in 2016 of a bunch of beverage can manufacturing plants that US packaging group Ball Corp and UK peer Rexam were forced to sell to get competition authorities to allow their merger. Coulson secured a New York listing for that unit, called Ardagh Metal Packaging (AMP), in 2021, leaving Ardagh Group with a 76 per cent stake. He delisted Ardagh Group, the parent company, the same year – as equity markets were prepared to give metal packaging businesses a higher valuation than glass. AMP, whose sales and earnings have recovered strongly in recent quarters, even as the glass business remains under pressure, became the centre of a major battle in recent months. Originally, Coulson wanted to give bondholders control of the struggling glass business, while he and other legacy investors would retain an 80 per cent stake in AMP. Talks along those lines broke down in late May. The final accord will see Coulson – who has extensive other assets – hand over 92.5 per cent of the group to senior unsecured creditors, who are owed $2.39 billion, and 7.5. per cent to a group of lower-ranking debt investors, known as payment-in-kind not holders. They are owed $1.98 billion. Major bondholders that are set to become shareholders include: California-based Franklin Templeton, which is best known from taking a major bet on Irish government bonds at the height of the financial crisis; Wall Street giant JP Morgan; and New York-based Monarch Alternative Capital. The restructuring is expected to be completed by the end of September. Coulson might have gone down the legal route to assert rights over AMP, as it was a so-called unrestricted subsidiary of Ardagh Group, separated by a holding company that was set up in April 2022. In the end he opted for a consensual arrangement with the $300 million pay-off. The deal also avoids a change of control at the AMP level within the group, which would have resulted in its own $3.69 billion of bond debt automatically falling due for repayment.
Bloomberg
2 days ago
- Business
- Bloomberg
Ardagh Creditors Agree to Take Over Packaging Firm From Coulson
Ardagh Group SA has agreed with a debt restructuring which will see some of its creditors take control of the whole business from Irish billionaire Paul Coulson. Holders of $4.3 billion combined senior unsecured notes and payment-in-kind notes will swap their debt for equity, according to a press release published on Monday. The senior unsecured bondholders will own 92.5% of the equity following the transaction, while the PIK holders will get 7.5% of the shares.
Irish Times
2 days ago
- Business
- Irish Times
Paul Coulson to get €108m payment from Ardagh creditors to cede control of group
Irish financier Paul Coulson has agreed to cede entire control of Ardagh Group , the glass bottles and drink cans giant he built up over the past 25 years, to a group of its bondholders in exchange for a share of a $300 million (€257 million) pay-off. The company at the top of Ardagh Group corporate tree has an estimated $12.5 billion of debt, which became unsustainable after its earnings were hit since the Covid-19 pandemic by inflation, soaring interest rates, and soft consumer demand on both sides of the Atlantic. Ardagh Group's customers range from Coca-Cola and Heineken to Swiss group Nestlé. Mr Coulson (73) effectively has a 36 per cent stake in the business, with the rest largely in the hands of management and a group of small investors that date back to Ardagh's previous existence on the Dublin stock market. On that basis, he will end up with a €108 million payment to walk away from the business. READ MORE The major debt restructuring will see senior unsecured bondholders and holders of high-risk payment-in-kind notes swap $4.2 billion of debt for equity in Ardagh Group. The senior unsecured creditors will end up with 92.5 per cent of the equity in the group, and holders of the PIK Notes will hold 7.5 per cent. [ Meet Paul 'the Cooler' Coulson: One of the godfathers of leveraged finance Opens in new window ] 'Ardagh Group is pleased to have achieved this significant milestone in agreeing a comprehensive recapitalisation transaction with its key financial stakeholders,' said group chairman Herman Troskie. 'The transaction will preserve the group's ownership of its glass and metal packaging businesses and puts in place a sustainable capital structure, with significantly lower leverage and an enhanced maturity profile. Together with the injection of new capital, Ardagh will be well-placed to deliver our business plan in partnership with our future shareholders.' Mr Coulson entered the glass bottle business in 1998 by buying an initial stake and taking over as chairman of the Irish Glass Bottle Company, which traces its roots back to 1932. After renaming the company Ardagh, he orchestrated a series of overseas acquisitions, fuelled by high-cost debt raised on the international junk-bond market, that would create one of the world's largest packaging groups with annual sales of more than $9 billion. The original bottle-making factory in Ringsend in Dublin was closed in the process, in 2002. 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. The $300 million Mr Coulson and the other investors will share is a fraction of Ardagh Group's market valuation. In 2021, it peaked at almost $6.7 billion. That valued the businessman's holding at about $2.4 billion. Ardagh Group was delisted later that year, after it decided to float its drink cans unit, Ardagh Metal Packaging (AMP). Mr Coulson stepped down as chairman of the group in late 2023, but remained a director and its major shareholder. Still, long-term investors in the group made handsome returns over the years as Ardagh Group distributed hundreds of millions of euros, often funded by the issuance of debt. While earnings have improved significantly in recent quarters in AMP as customers increasingly favour aluminium cans over glass and plastic packaging, the bottle-making business has remained under pressure. AMP's chief executive, Oliver Graham, signalled in April that the business had 'turned a corner', helped by a rebound in demand for energy drinks, sparkling water and health segments. AMP reported on Thursday that its earnings before interest, tax, depreciation and amortisation (Ebitda) rose 18 per cent in the second quarter to $210 million. The company upgraded its full-year earnings forecast for a second time and now sees Ebitda rising to $705 million-$725 million from $672 million for 2024. It had started out the year predicting that earnings would fall between $675 million and $695 million. Ardagh Group typically reports results on the same day as AMP. However, it held off on publishing its figures as the debt restructuring talks reached a pivotal stage.
Bloomberg
22-07-2025
- Business
- Bloomberg
Shuttered NY College Campus Sale to Give Bondholders 50% Recovery Rate
A group of local residents in upstate New York is planning to buy the shuttered Cazenovia College campus for $9.5 million — a sum that, when combined with other funds, is estimated to give bondholders a recovery rate of just over 50%. Cazenovia College, a liberal arts institution, closed in the summer of 2023, amid enrollment pressures facing small schools across the US. It had sold about $25 million of municipal bonds in 2019 secured by school revenues and a mortgage on the campus, which was appraised at $24 million at the time, according to bond documents.
Bloomberg
22-07-2025
- Business
- Bloomberg
Multibillion Dollar Hopes for Gas Riches Fuel Mozambique's Bonds
Mozambique's bonds have generated three times the average return from emerging markets since April, boosted by the conflict-rattled nation's plan to revive a multibillion-dollar gas project. Bondholders have made more than 23% gains from the country's restructured 2031 dollar note since April 9, versus a 6.5% total return on Bloomberg EM Sovereign Index. That's helped it escape an indicator of debt distress, with yield premiums over US Treasuries falling under 1,000 basis points.
