Paul Coulson borrows $1.5bn to bankroll Verallia deal
ARDAGH Glass, the global container maker headed and controlled by Dubliner Paul Coulson, has tapped markets for $1.53bn (€1.1bn) in debt financing to help bankroll its planned acquisition of the Verallia glassmaker in the US.
The debt-raising comes just two weeks after Ardagh was forced to pay back $1.5bn in bonds it raised last year to close the deal, after the agreement to buy Verallia North America for $1.7bn (€1.2bn) was delayed by the US Federal Trade Commission (FTC) amid competition concerns.
Ardagh, which has its roots in Irish Glass, had to pay back the money if the deal had not been consummated by a certain date. It had offered those bondholders a fee to extend the mandatory redemption deadline from this month to July 13.
But the offer required majority consent from bondholders and agreement wasn't secured by Ardagh. Ardagh said yesterday it planned to raise the fresh funds for the Verallia purchase via the proposed syndication of a $700m-term loan and offering a total of $830m in notes that will fall due in 2019 and 2021.
The FTC and Ardagh have been engaged in negotiations for months on Verallia. The FTC sought to prevent Ardagh's takeover of Verallia last summer.
The watchdog complained that the Verallia purchase by Ardagh would "hurt consumers nationwide" in the United States as it would result in higher costs for drinks containers. Ardagh insisted that the picture the FTC painted of a "tacitly collusive" glass manufacturing sector in the US is a "far cry from the truth". Its acquisition of Verallia, if it's pushed through, will be Ardagh's biggest-ever deal.
In an effort to appease the FTC, Ardagh has proposed to sell six US manufacturing plants that came under its control when it bought rival Anchor Glass in 2012.
It has also pledged to sell two other related operations and the headquarters of Ardagh Glass in Florida.
The assets Ardagh plans to sell had associated revenues of approximately $565m; earnings before interest, tax, depreciation and amortisation of approximately $103m; and capital expenditure of approximately $40m in the 12 months to September 20, 2013.