Saturday 18 November 2017

Ardagh will repay bonds raised for US glass-maker Verallia acquisition

Paul Coulson
Paul Coulson
John Mulligan

John Mulligan

Glassmaker Ardagh, which is headed by Dublin financier Paul Coulson, will on Friday repay $1.5bn in bonds it raised to fund the planned $1.7bn (€1.2bn) acquisition of US glass business Verallia, it confirmed this evening.

Ardagh has been battling the US Federal Trade Commission (FTC) over its planned acquisition of Verallia, which is owned by French industrial giant Saint-Gobain.

Ardagh announced the deal to buy Verallia in January last year. The Irish firm then raised a total of $1.5bn in bonds it planned to use to finance the acquisition.

Those dollar and euro-denominated bonds included a €250m issue with a 5pc coupon, or interest rate, a $420m bond with a 4.875pc coupon, and $850m with a 7pc coupon.

If Ardagh didn't complete the Verallia North America (VNA) acquisition by today, it had to repay the euro bond, the $420m bond and $700m of the $850m bond. Ardagh had hoped as late as last week to complete the deal on time to avoid repaying the bonds.

In a statement this evening, Ardagh confirmed that the bonds will be repaid in full on Friday.

"To enable it to complete the acquisition of VNA, Ardagh has arranged committed replacement bridge financing which it expects to refinance in the capital markets in due course," said Ardagh.

In October, Ardagh offered the bondholders a fee to extend the mandatory redemption deadline from today to July 13. But agreement wasn't secured by Ardagh.

Ardagh said this evening that to enable the Verallia acquisition to proceed, and to finalise negotiations with the FTC, Ardagh and Saint-Gobain have agreed to extend the final closing date under the Verallia purchase agreement from today to April 30.

The FTC sought to block the Verallia purchase, which would be Ardagh's second biggest acquisition, last July. 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, and consequently the drinks consumers buy. Ardagh insisted it wouldn't.

Ardagh entered the US market in 2012 when it acquired Anchor Glass and Leone Industries.

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