Ardagh Glass raises €1.7bn to fund Impress deal

 

ARDAGH GLASS has borrowed close to €1.7 billion in both euro and dollars to fund its planned purchase of tin maker Impress Co-operative through a sale of bonds to financial institutions.

The company said yesterday that it placed €1.1 billion and $800 million (€587 million) worth of bonds with international institutions.

It reported that there was strong demand for both denominations of debt and added that the offer was “heavily oversubscribed”.

Ardagh will use the cash raised to pay for the €1.7 billion purchase of Impress Co-operative, which it announced earlier this week, and to repay and refinance €380 million of debt that it owes Anglo Irish Bank.

Private equity player Doughty Hanson, which owns Irish broadcaster TV3, is selling Impress to Ardagh. Impress manufactures and sells tins to household names such as food companies John West and Del Monte and operators such as Crown Paints and household products manufacturer Proctor Gamble.

Doughty Hanson formed Netherlands-based Impress in 1997 by merging companies based in France, Germany and the US. The business formed as a results of this week’s deal will be known as Ardagh Packaging Group and will have combined sales of €3.1 billion and debt of €2.6 billion.

Ardagh has sales of €1.2 billion and employs 6,500 people. The Impress takeover will open up new markets and products for the company. Manufacturing and selling beer bottles accounts for around 40 per cent of its business, but once the deal goes through, this will be just 13 per cent of its overall sales. Management also intends creating savings from the enlarged group.

The bonds it intends to issue will be both secured and unsecured. Earlier this week, Moody’s and Standard Poor’s, which specialise in assessing company’s ability to meet their liabilities, rated Ardagh’s debts as low risk.

Financier Paul Coulson chairs Ardagh and its chief executive is Niall Wall. Four years ago, it sold the Irish Glass Bottle site in Ringsend, Dublin, to a group of investors which included the State-owned Dublin Docklands Development Authority and developer Bernard McNamara.

Mr Coulson formed the business in the late 1990s and it has earned its backers 50 times their original investment since then.

Ardagh is said to be eyeing the glass manufacturing operations of the troubled Quinn Group.