Ardagh Group Undergoes Major Shift as Founder Paul Coulson Cedes Control
Bondholders to Take Over Packaging Giant in Debt-for-Equity Swap
Financier Paul Coulson‘s prominent packaging firm, Ardagh Group, is set for a significant ownership change. After accumulating substantial debt, the company will transition to control by its bondholders through a debt-for-equity swap, a move finalized after extensive creditor negotiations.
High-Wire Financing Leads to Restructuring
Ardagh Group, built over 25 years by Paul Coulson, grew into a major player in glass and metal packaging by leveraging global junk bond markets for acquisitions. At its zenith four years ago, the company boasted a valuation of $6.7 billion, with Coulson holding a substantial 36 percent stake. However, the firm’s $12.5 billion in borrowings proved unsustainable amidst rising inflation, interest rates, and declining consumer demand across the Atlantic.
Shareholders to Receive $300 Million Exit Payout
Paul Coulson, along with former and current management and long-term investors, is set to receive a $300 million “go-away” payment. This payout is part of the broader restructuring, allowing these stakeholders to exit the company. Over the years, Ardagh’s shareholders are understood to have benefited from over $2 billion in distributions, including dividends, share buybacks, and proceeds from the sale of its original Dublin site just before the 2008 property crash.
Coulson’s Financial Acumen and Early Ventures
Known as “the Cooler” from his university days, Coulson demonstrated early financial prowess by restructuring the finances for the Trinity Ball in the early 1970s. His career began as an accountant in London. A notable early venture was Yeoman International, an aircraft leasing firm he founded, which later incurred significant losses after acquiring a British leasing company. This led Coulson to sue his advisors, merchant bank SG Warburg, securing a substantial out-of-court settlement.
“In targeting a business more than six times the size of Ardagh by value, **Coulson** set the funding template for what would underpin billions of euro of subsequent deals: leverage.”
Transformation of Ardagh Group
Coulson‘s trajectory shifted dramatically with his acquisition of the Irish Glass Bottle Company in 1998. He transformed the company, renamed Ardagh Plc, by acquiring Rockware, Britain’s largest glass bottle maker, for £247 million. This strategic move, funded by leverage, laid the groundwork for Ardagh’s expansion into glass and metal packaging. The restructuring also involved the closure of the Irish Glass Bottle plant in 2002, impacting 375 workers. In 2003, the group was split, with Ardagh Glass being taken private and South Wharf, which held the Dublin glass site, remaining listed. The sale of the Dublin site in 2006 yielded €411 million for South Wharf shareholders.
Ardagh Metal Packaging Becomes Core Asset
A pivotal moment for Ardagh Group was the $3.4 billion acquisition in 2016 of beverage can manufacturing plants from Ball Corp and Rexam. This led to the creation of Ardagh Metal Packaging (AMP), which Coulson listed in New York in 2021. AMP’s strong recent performance in sales and earnings contrasts with the ongoing pressures on the glass business. The recent restructuring agreement will see Coulson cede 92.5 percent of the group to senior unsecured creditors owed $2.39 billion and 7.5 percent to payment-in-kind note holders who are owed $1.98 billion.
Major Investment Firms Take Stake
Key bondholders set to become shareholders in Ardagh Group include Franklin Templeton, known for its investments in Irish government bonds during the financial crisis, JP Morgan, and Monarch Alternative Capital. The comprehensive restructuring is anticipated to conclude by the end of September. Coulson‘s decision to pursue a consensual arrangement, accepting a $300 million payoff, also serves to prevent the automatic acceleration of AMP’s $3.69 billion in bond debt. The global aluminum can market is projected to reach $63.6 billion by 2030, indicating continued demand for such packaging solutions (Fortune Business Insights 2024).