Hedge funds sue Ardagh and owner Paul Coulson over debt plan

The two funds, which together hold more than 30% of Ardagh’s sterling-denominated unsecured notes due in 2027, claim the metals arm is the most valuable asset owned by the company

Tue, 18 Mar, 2025 - 17:51

Irene García Pérez

Hedge funds Arini and Canyon Partners LLC filed a lawsuit in New York against Ardagh Group and its billionaire owner Paul Coulson over a restructuring plan they allege siphons value away from creditors.

Last week, the packaging conglomerate said it is in talks with a group of unsecured creditors for a deal that would slash its debt pile.

As part of the plan, unsecured creditors would take over the glass business and a minority stake in the metals unit.

Arini and Canyon, however, are opposing the transaction, claiming it is designed for the “benefit of insiders” including Mr Coulson, as he would keep control of Ardagh Metal Packaging SA with existing shareholders.

The two funds, which together hold more than 30% of Ardagh’s sterling-denominated unsecured notes due in 2027, claim the metals arm is the most valuable asset owned by the company.

Ardagh has been negotiating a debt deal with its creditors for months amid rising inflation and higher interest rates.

Capital structure before debt

In its full-year report distributed to bondholders at the end of February, it said its ability to complete a review of its capital structure before debt came due was a “material uncertainty”, according to the filing.

Spokespeople for Arini and Canyon declined to comment. An official for Ardagh did not respond to a request for comment, while a representative for Mr Coulson could not be reached.

Ardagh, which traces its roots back to the Irish Glass Bottle Company in Dublin, grew in recent years by way of cheap bonds and loans.

The company had $10.6bn (€9.7bn) of consolidated debt as of end of last year.

Arini and Canyon allege the restructuring plan announced last week would be a “fraudulent transfer” that would not adequately compensate unsecured creditors, while undermining the financial position of the group.

In the lawsuit, the funds also argue the transfer of Ardagh Metal Packaging shares to a new entity in 2022 should be voided, while a special purpose acquisition company transaction of the metals business completed shortly before that “closely resembled a dividend recapitalisation” to favour Mr Coulson and other insiders.