Ardagh has early 2017 share sale in its sights
Shareholders in Ardagh Group, including founder Paul Coulson, will share a €270m bond market funded payout after the business closes its latest bond market-supported refinancing.
Meanwhile, investors are understood to have been briefed that the Irish packaging giant could float a minority stake in an operating unit as early as next year.
Before that, the company's holding company said yesterday that it is issuing $1.565bn of senior bond debt due to be repaid in 2023. Managers are taking advantage of current market conditions to secure cheaper debt for a longer maturity for the second time this year.
Proceeds of the new bond deal will be used to repay €1.121bn of bonds carrying interest rates of more than 8pc early. The bonds had been due for repayment in 2019 .
A share of the new debt will also fund the €270m payout to shareholders.
The refinancing deal is being done at Ardagh Group's holding company level, which sits above the group's operating assets.
The Irish Indepdendent understands that bond investors were also briefed yesterday that a partial stock market flotation of a 5pc to 10pc stake in Ardagh, at operating company level, may be on the cards for as soon as the first half of 2017.
An initial public offering of Ardagh stock has long been on the cards. Last year the group pulled a planned stock market flotation of its metal containers business that would have valued the unit at up to €2bn, citing poor market conditions.
Earlier this year huge investor appetite helped Ardagh issue €3.9bn of bonds at a rate that drove down the cost of its acquisition finance to 4.9pc.
The cash was to finance the acquisition of a Metal Beverage business from Ball Corporation and Rexam that completed on June 30, 2016.
Debts carrying interest rates as high as 9.25pc were refinanced with the new longer dated bonds, the most costly of which carries a 7.25pc coupon.
Since taking over the company in the late 1990s, Mr Coulson (64) has used debt to build Ardagh into the largest glass-container maker in northern Europe and second-largest in the US.