Under a plan first outlined in March, a group of unsecured bondholders were expected to take over Ardagh’s glass-packaging operations in exchange for a write-down on what they are owned.
They’d also receive $784m of preferred equity.
The creditors were to provide fresh financing and crucially get a stake in Ardagh’s metal-packaging arm, which is listed in the US and produces cans for the drinks industry. The US stock market listed shares own 24pc of the cans side of the business.
Under the terms that had been under discussion between Ardagh and the lenders since March the remaining 76pc stake in the cans unit would be divided 80:20 between Paul Coulson and the unsecured bondholders.
However, on May 18th s a modified proposal from the senior unsecured Ardagh bondholders pushed changes including for a 60:40 split of the canning business stake.
Ardagh on Tuesday said Paul Coulson, as majority shareholder, had rejected that proposal.
“The parties were unable to reach an agreement and have concluded negotiations at this time. The company remains committed to putting in place a sustainable capital structure. The company will continue to review its options and may continue discussions with its financial stakeholders in the future relating to its capital structure and its applicable debt maturities,” Ardagh said.
The restructuring negotiations involve Coulson and Ardagh, a lender group dubbed the SUN bondholders who own most the Ardagh’s Senior Unsecured Notes plus some Senior Secured Notes and a second lender group dubbed the SNN bondholders who own a majority of Ardagh’s higher ranked Senior Secured Notes plus some unsecured notes.
Rejection by Ardagh of the SUN group’s latest demands is likely to see the firm shift focus to trying to cut an alternative deal with the better secured SNN lender group who’d have been largely unaffected by the proposed deal with the Sun group, with their debt to be reinstated in part into new debt instead of riskier equity.
While a debt deal is widely seen as necessary to address the scale of Ardagh’s borrowings a hard deadline to concentrate minds is likely to be some way off, with no major debt repayments falling due until August 2026.
Ardagh Group had cash and available liquidity at March 31, 2025, of over $1.1bn. The debt talks have no impact on day to day operations at any of the group’s operations.
The group had $10.6bn (€9.7bn) of consolidated debt as of end of last year, although only part of it was subject to the restructuring.
The March deal from the unsecured bondholders’ group had the support in principle of Paul Coulson and looked to be moving towards a consensual restructuring transaction.
The group of unsecured creditors is being advised by PJT Partners Inc and Akin Gump Strauss Hauer & Feld LLP.
The secured creditors are working with Perella Weinberg Partners and Gibson, Dunn & Crutcher LLP.
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