'We need to protect ourselves' - Ardagh's Coulson in Brexit plea
Published 17/09/2016 | 02:30
Ireland's interests are now different to those of Britain, and the country needs to "face up to issues" that Brexit poses, the chairman of packaging giant Ardagh, Paul Coulson, has warned.
In a very rare public speech by the hugely successful businessman, who helped build Irish Glass into a global manufacturing group with annual revenues of almost $8bn, Mr Coulson (64) also said that Ardagh could not have become the company it did without the help of Anglo Irish Bank. He said that the blame for the collapse of Ireland's financial institutions has not been "equitably apportioned".
And in a swipe at his former competitor, ex-billionaire Sean Quinn, Mr Coulson also said that no-one from outside the financial services sector should ever be again allowed to operate an insurance business in Ireland. He said that the existence of "dominant individuals" controlling insurance licences "should not be allowed".
Quinn Insurance collapsed in 2012, leaving motorists shoulder the €1.1bn fallout. Mr Quinn and Mr Coulson - nicknamed 'The Cooler' - were rivals in the glass container manufacturing sector for a number of years.
Speaking to an audience of over 600 people at an Institute of Directors lunch in Dublin yesterday, Mr Coulson said that the implications for Ireland of Brexit are "very serious".
"I expect the trading relationships between the two islands are going to be very different. We need to protect ourselves," he said. "Our interests are now different from those of Britain. Britain has decided to leave. We have to ally ourselves with the Europeans."
Mr Coulson - whose family's wealth amounts to over €1bn - pointed out that he was born in Britain into a very poor family, and still lives there. He also owns property in Paris, and a multi-million euro mansion on Dublin's Shrewsbury Road.
"Britain is complacent and in denial about how serious this problem is," he said. "We in Ireland should make sure we're not complacent and that we face up to the issues that are coming down the track here." He added: "The damage that has been done to the European project by this decision is extremely serious. The need for [the EU] given the political situation around the world… is as great as it ever was back in the 1950s. It's very sad that this has happened."
Mr Coulson recalled how he and his team built Irish Glass from a one-site manufacturing business in Dublin to a global Goliath that is now one of the biggest players in the sector.
Mr Coulson and his family own about 39pc of Luxembourg-based Ardagh, which maintains an office in Dublin, but no longer has any manufacturing presence here.
He has fuelled Ardagh's growth by tapping the high-yield bond market to finance acquisitions that are among the biggest ever undertaken by an Ireland-linked group.
Those acquisitions include the $3.4bn purchase this year of assets that were sold by US-based Ball Corp and UK-based Rexam to appease regulators as Ball moved to buy Rexam.
"The high-yield market has been where we have successfully made our home," said Mr Coulson. "We started in 2003 in Europe, and since 2010 we've been in the US bond market. The key to our success in that market has been the amount of time and energy we've spent developing relationships, particularly in North America.
"In building these relationships and building up trust, we've quite frankly been able to punch well above our weight in terms of being able to borrow money at rates and in quantities that perhaps we shouldn't otherwise have been able to do."
That bond-fuelled expansion has seen Ardagh amass a debt pile of about €8bn.
Just last week, Ardagh sold a $1.7bn so-called Payment-in-Kind (PIK) bond, with the proceeds used to refinance some existing debt at a lower interest rate, and also to hand a $270m dividend to shareholders.
Famously, under the stewardship of Mr Coulson, Irish Glass sold its site in Dublin's Ringsend in 2006 to a consortium of investors for €412m.
Mr Coulson said yesterday that in the past 10 years, Ardagh has returned over €850m to shareholders, with €570m of that from the packaging business and the remainder from the sale of the Irish Glass site.
Mr Coulson said that using the bond market is "very efficient" and avoids the "delays and torture" that would ensue trying to negotiate bilateral facilities with banks.
"In 2014, we went into the market one Thursday afternoon and came out the following afternoon having refinanced $4.5bn of our debt," he said.
Mr Coulson added that the most recent PIK issue was also done in 24 hours.
Ardagh also said last week that it is aiming to sell about 5pc of its operating company on the stock market next year, in yet another tilt at a flotation. Ardagh has had a number of attempts to float parts of its business, but pulled them all.
He insisted that the company is determined this time to hit the stock market, conditions permitting. "The focus now is very much on getting the subsidiary listed," he said.