Cantillon: Heat on Cooler over funding

The man they call the Cooler will have to draw on his financial acumen to pull off what would be his biggest deal – and keep lenders onside. Paul Coulson’s Ardagh Group is said to be lead bidder for between $3 billion (€2.7 billion) and $4 billion of assets being sold by US packaging group Ball Corp and British peer Rexam to appease competition authorities ahead of their planned merger.

Funding options appear limited. If Ardagh relied only on borrowings, its net debt would rise to €8.4 billion, or 6.3 times operating earnings from 5.2 times at the end of last year. That’s a heavy burden by any standards. But all the more when you’ve promised to deleverage.

So, could Coulson dust off a plan, dropped in 2014, to raise hundreds of millions of euro of private equity investment? Having pulled the flotation of its metals unit last year, Ardagh is hardly likely to tap the public equity markets any time soon.

Otherwise Ardagh’s options would be down to selling off some of the acquired assets immediately or scraping out some pretty impressive cost savings.