Ardagh to pay 8.75% rate on debt to fund shareholder windfall
Offering understood to have been many times oversubscribed
Paul Coulson is set to benefit by €100 million, based on his 36 per cent stake in the holding company. Photograph: Alan Betson
The ultimate parent company of glass and metal containers maker Ardagh Group is set to pay an 8.75 per cent interest rate on debt being sold to fund a shareholder windfall.
It is understood that the sale on Thursday of $350 million (€291.4 million) of so-called payment-in-kind notes by the holding company, ARD Holdings, was many times oversubscribed. However, the interest on the bonds will be rolled up and added to the principal of the debt over the five-year lifetime of the notes, rather than investors receiving regular cash payments.
Liquidity ARD Holdings said on Wednesday that it planned to use the $344 million net proceeds from the debt sale to “provide liquidity to its shareholder”. The group’s executive chairman and chief executive, Paul Coulson is positioned to benefit to the tune of €100 million, based on his 36 per cent stake in the holding company.
The operating company below ARD Holdings, Ardagh Group floated on the New York Stock Exchange last year as an 8 per cent stake was placed with stock-market investors. Mr Coulson owns a third of the operating company, where customers include L’Oreal, Heineken and John West.