Latest news with #ArdaghGroup
Irish Times
10 hours ago
- Business
- Irish Times
Paul Coulson faces last stand in battle to retain control of Ardagh
Ten years ago last month, Dublin businessman Paul Coulson walked away from a €3 billion deal to buy a glass-bottle business being sold by French building materials group Saint-Gobain. It seemed a rare moment of restraint for a man in a hurry, having spent the previous 15 years turning a once sleepy Irish bottle company into a multibillion-euro packaging giant – Ardagh Group – through a series of purchases funded by debt raised in the high-cost, junk-bond market. It would not last long. Less than a year later, Coulson unveiled a similar-sized transaction, but one that would catapult Ardagh into the business of making cans for beers and fizzy drinks. Today, that business – Ardagh Metal Packaging (AMP), whose customers range from Coca-Cola and Heineken to Nestlé – has surfaced as a prized asset as Coulson and holders of some of wider group's $12.5 billion (€10.7 billion) of borrowings scramble to salvage what they can from an empire saddled with too much debt. Coulson effectively owns 36 per cent of Ardagh Group. READ MORE Ardagh Group has acknowledged for more than a year that it needs to reduce its liabilities, after both its glass and beverage cans businesses had been hit since the Covid-19 pandemic by inflation, soaring interest rates, and soft consumer demand on both sides of the Atlantic. The heavily-indebted business proposed in March that 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 containers part of the business. The plan also envisaged Ardagh Group spinning its shares in AMP into new company (NewCo). This would be 80 per cent owned by Coulson and other existing Ardagh Group shareholders – with the unsecured creditors receiving the remaining 20 per cent. Holders of a further $1.79 billion of the group's riskiest debt, so-called payment-in-kind bonds issued by a holding company at the top of the Ardagh corporate tree, know they're toast, with these notes trading below 5 per cent of their original value. Talks with the unsecured creditors broke down in May after they pitched a proposal that would see them take 40 per cent, rather than 20 per cent, of AMP, which has seen its prospects improve in recent quarters, even as the glass containers arm of the group continues to grapple with weak demand. The unsecured creditors also wanted the $784 million of preference shares they were being offered in the NewCo to be increased to $1.07 billion. AMP, in which Ardagh Group has a 76 per cent stake, is listed on Wall Street, where investors have also recently come to appreciate the improving outlook for this business – even as the glass side struggles. The market value of AMP, which has $3.98 billion of ring-fenced borrowings, has jumped more than 45 per cent to $2.59 billion so far this year. This was driven by a spike in April when its chief, Oliver Graham, signalled that the business had 'turned a corner', helped by a rebound in demand for energy drinks, sparkling water and health segments. The value of Coulson's indirect 27 per cent stake in AMP has increased as a result to more than $700 million. This is well off the $1.7 billion it was worth when the stock debuted on the New York Stock Exchange almost four years ago. It is also a fraction of the now 73-year-old's €2.4 billion interest in the wider Ardagh Group when it peaked in April 2021 – before the group delisted and floated its beverage cans unit. It emerged last week that certain bondholders have offered Coulson – who remains on the board of the group, having retired as chairman in late 2023 – and other investors in Ardagh Group $250 million to hand over total control of the empire to creditors and walk away. Shareholders include management and investors that remained on board a tiny version of the current group that was listed in Dublin more than two decades ago. The bondholders clearly do not feel the need to keep Coulson on after a restructuring. This differs from the case of fellow former junk-bond darling, Denis O'Brien , when his overindebted Digicel mobile phone company ran out of road two years ago. Digicel had no equity value when its bondholders took control in a subsequent debt-for-equity swap. However, the creditors left O'Brien with a 10 per cent stake and stock warrants that would entitle him to a further 10 per cent, subject to the company meeting certain targets, knowing they needed him to maintain key relationships with regulators and politicians across its 25 emerging and, in some cases, frontier markets. The problem for Ardagh Group bondholders is the corporate web structure – including a company set up in April 2022, at a time when interest rates were soaring globally, under the group to hold its 76 per cent stake in AMP. This was designated a so-called unrestricted subsidiary, putting its assets out of reach of group creditors. The directors of that subsidiary sought fit last year to set up another unit to hold the prized asset. Bondholders thinking they can wave off Coulson and a small number of legacy investors in Ardagh Group with a $250 million check had better have the bottle for a battle.
Yahoo
20-06-2025
- Business
- Yahoo
Paul Coulson offered $250m to exit Ardagh Group
Irish billionaire Paul Coulson is close to finalising a deal that would transfer complete control of Ardagh Group, a global packaging giant he developed, to its creditors, reported Bloomberg. Coulson will receive a one-time payment of approximately $250m in exchange for Ardagh's glass business and his majority stake in the metal unit. The decision follows intense negotiations with creditors to resolve Ardagh's substantial debt, which includes approximately $12.5bn in borrowings. Under the proposed settlement, Coulson will step away from the company he has expanded over the last two-and-a-half decades, which includes relinquishing the Ardagh Metal Packaging (AMP) division. The terms of the deal, still under discussion, are part of broader debt solution talks. These talks are centred on addressing around $2.5bn of bonds due in August 2026 and would require a fresh capital injection into the business. Bloomberg reported that unsecured creditors would gain a majority stake post-restructuring, with secured creditors having their debt reinstated at par and receiving a high coupon rate. Coulson had initially proposed spinning off shares from the AMP division into a new entity, with 80% ownership retained by existing Ardagh shareholders and only 20% allocated to unsecured creditors. Ardagh currently holds a 76% stake in the New York-listed AMP. Ardagh Group acknowledged the need to reduce its $12.5bn debt more than a year ago, as the financial burden grew unsustainable amid disappointing earnings. The situation with senior unsecured creditors became more complex when Ardagh announced in April that its beverage cans unit had seen a turnaround, with a surge in activity across various beverage categories. AMP's revenues increased by 11% year-on-year in the first quarter, reaching $1.27bn, prompting an upward revision of its full-year earnings forecast. In contrast, Ardagh's legacy glass business experienced a 6.7% revenue decline to $961m in the same quarter, continuing its struggle. Additionally, holders of approximately $1.8bn in high-risk bonds from a holding company above Ardagh Group stand to lose the majority of their investment, with these bonds currently trading at only 4% of their initial value. Coulson's control over Ardagh Group is facilitated through an 18.8% direct stake in its ultimate parent and a 52.4% interest in Yeoman Capital, which owns 33.9% of the group, effectively giving him a 36.6% equity share in the business. "Paul Coulson offered $250m to exit Ardagh Group" was originally created and published by Packaging Gateway, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
Irish Times
19-06-2025
- Business
- Irish Times
Paul Coulson offered $250m to walk away from Ardagh amid crunch debt talks
Businessman Paul Coulson has been offered $250 million (€218 million) by bondholders in Ardagh Group to walk away from the packaging empire he built over the past 25 years, as debt restructuring talks enter a crunch phase. The offer would see Mr Coulson cede control of the glass and metal containers giant, which has about $12.5 billion of borrowings, and abandon previous notions of retaining control of its prized Ardagh Metal Packaging (AMP) arm, the sources said. The proposal is one of a number of potential debt solutions under discussion in parallel with the company, a source said. All involve substantially addressing about $2.5 billion of bonds that fall due in August 2026 and would involve the injection of new money into the business, the source added. Bloomberg first reported the offer for Mr Coulson to hand over entire control of Ardagh Group to certain bondholders, indicating it is the most likely outcome even as a number of alternatives remain in play. READ MORE Under the proposal, unsecured creditors would take a majority stake in the group after the overhaul, Bloomberg reported. Secured creditors would have their debt reinstated at par, and receive a double-digit coupon, it said. A spokesman for Ardagh Group declined to comment on the current state of talks. [ Ardagh talks with creditor group break down over improving cans unit Opens in new window ] The development comes weeks after Ardagh Group walked away from talks with unsecured bondholders, who were being asked by the group to write off much of the $2.32 billion they are owed in exchange for taking full ownership of the glass containers part of the business. Mr Coulson had envisaged Ardagh Group spinning its shares the valuable AMP division into a new company (NewCo) that would be 80 per cent owned by Mr Coulson and other existing Ardagh Group shareholders. He proposed that unsecured creditors would only receive 20 per cent of the division. Ardagh Group currently owns 76 per cent of New York-listed AMP. Bobby Healy on why Manna drone delivery could be the 'biggest technology company in the world for its space' Listen | 67:08 Ardagh Group, which Mr Coulson built into one of the world's largest packaging companies through a series of debt-fuelled acquisitions, 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 became more complicated when Ardagh Group said in April that the beverage cans unit had turned a corner', helped by a rebound in activity across the energy drinks, sparkling water and health and wellness categories. [ Ardagh enlists restructuring experts to board as it looks to cut €12bn debt Opens in new window ] AMP 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. 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. 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.
Bloomberg
19-06-2025
- Business
- Bloomberg
Irish Billionaire Coulson Nears Deal to Cede Ardagh to Creditors
Paul Coulson is nearing an agreement to hand creditors full control of Ardagh Group SA, the company he transformed into a global metal and glass packaging giant. The Irish billionaire is finalizing the details of a deal that would see him receive a one-off payment of about $250 million in exchange for handing over the company to debtholders after months of fraught negotiations, according to people familiar with the matter, who asked not to be named because they aren't authorized to speak publicly.
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.
