At its recent debt offer, Ardagh had to decide to issue an additional USD 680 million to fuel a heavily over-subscribed offer, which will enable it to save it at least USD 70 million (EUR 51 million) a year in interest repayments.
Ardagh, headed and controlled by Dublin financier Paul Coulson, took advantage of a strong appetite among investors in order to refinance existing debt instruments that fall due in 2017.
But while it initially intended to issue EUR 1.8 billion in debt, Ardagh quickly decided to issue an additional USD 680 million to fuel a heavily over-subscribed offer.
The latest debt issue by the company will save it at least USD 70 million (EUR 51 million) a year in interest repayments. Combined with a separate debt issue earlier this month, Ardagh’s annual interest payment savings have topped USD 90 million (EUR 66 million).
Coulson reaped a EUR 33 million dividend from this month’s previous debt issue, but no dividend will be paid from this more recent debt sale.
The latest debt issue also comes just days after the US Federal Trade Commission (FTC) approved the sale of six Anchor Glass plants in the US that are owned by Ardagh.
Ardagh is selling those facilities as part of a deal with the FTC competition watchdog to seal approval for the purchase of Verallia North America from French industrial giant Saint-Gobain.
Those six plants are being sold for about USD 500 million to New York private equity firm KPS Capital Partners – the owner of Waterford Crystal. Last year, the FTC had sought to block the acquisition of Verallia by Ardagh amid competition concerns.
Following months of negotiations, Ardagh agreed to sell six factories it had acquired as part of its purchase of Anchor Glass in 2012. The sale of those factories to KPS should be completed by the end of this month, or early July.
Under its latest debt offer Ardagh raised EUR 1.15 billion in notes that will mature in 2022 and USD 430 million in notes that will fall due in 2019. An additional USD 440 million of notes were issued that will mature in 2021. Earlier this month, Ardagh raised just over USD 1 billion via so-called payment-in-kind (PIK) notes. Those proceeds were used to pay a EUR 100 million dividend to shareholders.