Friday 20 April 2018

Coulson has 'no interest' in selling €1bn Ardagh stake

Ardagh chairman Paul Coulson
Ardagh chairman Paul Coulson
John Mulligan

John Mulligan

Ardagh chairman and CEO Paul Coulson said he has "no interest whatsoever" in selling off any of his family's $1.32bn (€1.07bn) stake in the packaging giant as the group firms up a mechanism to boost the freefloat of shares on the New York Stock Exchange.

The company - one of the world's biggest packaging groups for consumer goods from beer to beauty products - floated in New York last year.

However, just 8pc of the business was sold to investors. Mr Coulson and his family own 36pc of the wider group.

Last month, Ardagh indicated that it was eyeing a plan that in about two years' time would see shareholders in the group's holding company (holdco) - ARD Holdings - receiving shares in the listed entity - Ardagh Group SA - which they can then decide to sell or retain.

Shareholders in ARD Holdings don't currently own shares in the listed entity.

If they receive shares in Ardagh Group under the plan, the idea is that many will decide to sell those shares, boosting the freefloat on the stock market.

Speaking to analysts yesterday as Ardagh released fourth-quarter results, Mr Coulson said that the group hoped the future capital structure for the holdco would result in a "material" increase in the freefloat of shares in the listed entity.

"If we were to do this, and when we do it, we want to achieve a material increase in the freefloat in the listed company," he said.

"At the moment, it's 8pc. I would see it as being a multiple of that in terms of the increase in the freefloat. We need to make a material worthwhile increase in the freefloat."

There is about $2.1bn (€1.7bn) of debt at the Ardagh holdco level - separate to the €7.1bn of debt within the listed entity.

The eventual holdco plan would see part of the debt in that entity repaid, the remaining debt refinanced, and a material part of the holdco's 92pc shareholding in the listed Ardagh Group spun out to ARD Holdings shareholders.

Asked why Ardagh, which has its roots in Irish Glass, simply didn't sell shares straight to the market to improve liquidity, Mr Coulson said he and the company had "no interest" in selling shares in that manner and "certainly not at current levels".

"We believe this is a very valuable business and the major shareholders including myself have no interest in doing that," he said. "The reason we're doing it the way we're doing it is that it enables individual shareholders in ARD Holdings to make their own individual decisions as to whether they sell shares or not.

"As you know, my economic interest is of the order of 36pc - my family interest in ARD Holdings - so over a third of the shares in the listed company, in effect," added Mr Coulson. "I have no interest whatsoever in selling shares in this group. That's always been my position. I've been in this business for 20 years. This is a long-term hold."

Ardagh's revenue rose 20pc last year to €7.64bn, while its earnings before interest, tax, depreciation and amortisation (EBITDA) climbed 16pc to €1.34bn.

The results were in line with expectations and shares in Ardagh climbed more than 5pc in early trading in New York.

The company was boosted by a full-year contribution from assets acquired from rivals Ball and Rexam in 2016.

Mr Coulson said that as of this year, the company will also cease reporting its figures in euro and instead report in dollars. He also said that Ardagh has no desire to pursue any opportunities in emerging markets such as China or elsewhere.

"We are focused on Europe and the US. We have no interest in going near Asia. We don't have any interest in Africa or India or any of these emerging markets," said Mr Coulson.

Mr Coulson said that Ardagh is "very happy" with the evolution of its business in Brazil and could look to deepen its presence there.

Irish Independent

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