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.
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 unitOpens 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 from 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.
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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 debtOpens 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.
