Irish billionaire Paul Coulson is close to finalising a deal that would transfer complete control of Ardagh Group, a global packaging giant he developed, to its creditors, reported Bloomberg.
Coulson will receive a one-time payment of approximately $250m in exchange for Ardagh’s glass business and his majority stake in the metal unit.
The decision follows intense negotiations with creditors to resolve Ardagh’s substantial debt, which includes approximately $12.5bn in borrowings.
Under the proposed settlement, Coulson will step away from the company he has expanded over the last two-and-a-half decades, which includes relinquishing the Ardagh Metal Packaging (AMP) division.
The terms of the deal, still under discussion, are part of broader debt solution talks. These talks are centred on addressing around $2.5bn of bonds due in August 2026 and would require a fresh capital injection into the business.
Bloomberg reported that unsecured creditors would gain a majority stake post-restructuring, with secured creditors having their debt reinstated at par and receiving a high coupon rate.
Coulson had initially proposed spinning off shares from the AMP division into a new entity, with 80% ownership retained by existing Ardagh shareholders and only 20% allocated to unsecured creditors.
Ardagh currently holds a 76% stake in the New York-listed AMP.
Ardagh Group acknowledged the need to reduce its $12.5bn debt more than a year ago, as the financial burden grew unsustainable amid disappointing earnings.
The situation with senior unsecured creditors became more complex when Ardagh announced in April that its beverage cans unit had seen a turnaround, with a surge in activity across various beverage categories.
AMP’s revenues increased by 11% year-on-year in the first quarter, reaching $1.27bn, prompting an upward revision of its full-year earnings forecast.
In contrast, Ardagh’s legacy glass business experienced a 6.7% revenue decline to $961m in the same quarter, continuing its struggle.
Additionally, holders of approximately $1.8bn in high-risk bonds from a holding company above Ardagh Group stand to lose the majority of their investment, with these bonds currently trading at only 4% of their initial value. Coulson’s control over Ardagh Group is facilitated through an 18.8% direct stake in its ultimate parent and a 52.4% interest in Yeoman Capital, which owns 33.9% of the group, effectively giving him a 36.6% equity share in the business.
