Ardagh refinances over €2bn in debt

Glass and packaging group Ardagh has announced plans for an early refinancing of just over €2bn in debt, effectively removing any repayment deadlines from around its targeted IPO date of 2015.

The Luxembourg-based business — which is headed by businessman Paul Coulson — yesterday announced plans to raise around €1.8bn in a new debt sale; the proceeds of which will go towards paying off existing debt three years early.

The rest of the money will come from the proceeds of the sale of the six glass container manufacturing plants it is divesting as part of its near €1.3bn takeover of Verallia North America — the second largest glass container manufacturer in the US — from French multinational Saint-Gobain.

The new debt offering will see three different amounts — $1.15bn, $430m and $440m — being raised via the offering of separate senior notes.

The largest part of the new debt will not mature until 2022, with the other two elements maturing in 2019 and 2021.

Ardagh is taking advantage of good lending market conditions to pay off existing debt four years early — its two existing senior notes were due for repayment in 2017. It is also effectively clearing its schedule, in that, come the time of its proposed stock market flotation in 2015 it will have no pending debt to repay. This new plan will push Ardagh’s first due debt repayment date back to 2019.

Ardagh — which following the sale of the Verallia North America -related plants, will operate just under 100 production facilities across more than 20 countries worldwide — recently reported sales of €968m for the first quarter of 2014. A €13m annualised increase in earnings before interest, tax, depreciation and amortisation — to €155m — was also reported.

The recently approved takeover of Verallia North America is the Irish group’s biggest deal since its €1.7bn takeover of Impress four years ago. Yesterday’s pricing was four-times over subscribed after it added over $600m.