Ardagh Group Founder Secures $108M Payout in Debt Restructuring

Shareholders to Cede Control to Creditors in Major Deal

Ardagh Group’s billionaire founder, Paul Coulson, is set to receive a substantial $108 million payout as part of a complex debt restructuring deal that will transfer ownership of the packaging giant to its creditors. This agreement comes after months of intense negotiations aimed at addressing the company’s significant debt burden.

Shareholder Squeeze-Out Amidst Debt Crisis

The proposed transaction will see all Ardagh Group shareholders, including **Mr Coulson**, fully divested from both the glass and metals divisions of the business. Creditors are facilitating a payment of approximately $300 million, structured as an acquisition of **Mr Coulson**’s majority-owned Yoeman International vehicle. Sources indicate that **Mr Coulson** will receive about 36% of these funds, which will then be distributed pro-rata among the wider shareholder group.

A 24% stake in the company’s US-listed cans unit will remain unaffected by the transaction. Earlier proposals had envisioned **Mr Coulson** and fellow shareholders retaining some equity in the metals business, but this is no longer part of the plan.

Debt Restructuring Details Emerge

Ardagh Group has been grappling with an unsustainable debt pile, which stood at $10.6 billion at the close of last year. The current agreement aims to resolve this by providing approximately $1.5 billion in new debt from creditors. This funding will cover the shareholder payment, refinance a loan from Apollo Global Management, and inject fresh capital into the company.

The terms of the restructuring are expected to be finalized this week. The deal requires 90% creditor consent to avoid a potentially lengthier court-supervised confirmation process, likely in the UK. However, an agreement supported by 75% of a lender class can be enforced by the High Court in London.

Previous Impasses Broken

The negotiations have not been without their challenges. In May, talks had stalled, leading **Mr Coulson** and Ardagh Group to withdraw temporarily. However, the impasse has now been overcome, paving the way for the current creditor-backed proposal.

Unsecured bondholders are set to become the majority shareholders by writing off a portion of their claims. Secured bondholders will exchange their existing bonds for new debt instruments carrying an 11% interest rate, according to the revised plans.

The packaging industry, critical for supplying bottles and cans to global beverage companies, faces ongoing pressure from supply chain disruptions and fluctuating raw material costs. For instance, aluminum prices, a key component for Ardagh’s cans, experienced a significant surge in late 2021 and early 2022, impacting production costs across the sector (Reuters, March 2022).

Today’s News in 90 Seconds – July 28th