Ardagh raises €125m in loan note sale

Ardagh Glass has successfully raised €125 million through the sale of 10-year loan note.

Ardagh Glass is now a Guernsey-based private company which grew out of Ardagh plc. The successful placing of the loan note means its small shareholders will be offered €4 per share to buyout their stakes.

A spokesman for Ardagh said last night that the company had now received sufficient irrevocable (75 per cent) to enable all resolutions to be passed at an e.g.m. A date has yet to be decided for the the e.g.m.

The shareholders who chose to keep shares in the private company instead of accepting the cash alternative of €1.10 two years ago, have an option to retain an interest in the glass company this time around.

They can hold on to 10 per cent of their existing shareholding, which will be converted into shares in the newly created holding company Caono plc, while taking cash for the balance.

The €125 million notes, called senior pay-in-kind notes, have a 10-year maturity. They were priced at 99 per cent of face value. They pay a coupon of 10.75 per cent.

To date, the proceeds of such issues have been used to fund dividend payments to shareholders. Ardagh Glass is the first company to use the structure to raise money to invest in the company.

"The book was comfortably oversubscribed with over 50 investors participating and the transaction had lead orders from the regular payment-in-kind investors," said Mr Ponty Singh, a director in lead manager BNP Paribas's high-yield capital markets team.

They managed the deal with Citigroup.

Ardagh produces glass bottles for the food and drink market. Credit rating agency Standard & Poor's assigned a B+ rating to the notes, while revising Ardagh's outlook to negative from stable. - (additional reporting, Reuters)