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Ardagh Group S.A. Provides Update on Debt Negotiations

On May 20, 2025, Ardagh Group S.A. (AGSA) announced an important update regarding its discussions with holders of Senior Secured Notes (SSNs) and Senior Unsecured Notes (SUNs). This announcement follows previous updates on March 11 and April 7, 2025, indicating the company’s commitment to addressing its debt structure.

AGSA is currently in negotiations with two ad hoc groups representing its SSN and SUN holders. The SUN Group is backed by Akin Gump Strauss Hauer & Feld LLP, while the SSN Group is represented by Gibson, Dunn & Crutcher LLP. These groups collectively own a significant portion of the company's debt instruments, and their participation is crucial to Ardagh's efforts toward a sustainable capital structure.

Latest Developments

The negotiations have led to various proposals, with the latest from the SUN Group received on May 18, 2025. Unfortunately, no agreement has been reached yet, and discussions with this group have stalled. Despite this setback, AGSA remains determined to explore all available options regarding its capital structure and future debt maturities.

Key discussions have included potential divestitures and the restructuring of debt through proposed transactions:

1. Divestment of Ardagh Metal Packaging: There are talks concerning the sale of shares and preferred equity in Ardagh Metal Packaging S.A. to a new entity, New BidCo, which is to be partially owned by some existing shareholders and SUN holders.
2. Transfer of Holdings: The company might transfer its stakes in Ardagh Glass Packaging Africa and Trivium Packaging to its wholly-owned subsidiary, Ardagh Investments Holdings Sarl (AIHS), with new intermediate holding companies being established to manage these assets better.
3. Exchange of SSNs: The proposal includes converting some SSNs into new SSNs that would mature in December 2030, along with various interest payment structure options.
4. SUN Conversions: Similar provisions are being discussed for the SUNs, involving their exchange into preferred equity and possible future conversions into AGSA equity.

Financial Considerations

AGSA's management has underscored the importance of ensuring that any new financial arrangements do not compromise the company's liquidity or operational capabilities. As indicated, the restructuring would aim to prevent any adverse impacts on Ardagh's ongoing business operations while addressing the pressing need for capital improvements and eventual refinancing of existing obligations.

In conjunction with these talks, it was reported that as of Q1 2025, the company had $39 million in lease obligations at the Consol level, alongside other borrowings which included facilities extended by its African subsidiaries.

Leadership Transition

On a related note, the announcement included a significant leadership change. Mike Dick has stepped down from the board, effective May 18, 2025, to focus on operating Ardagh Glass Packaging while continuing in his role as CEO.

Conclusion

Ardagh Group is positioning itself to ensure a solid foundation for future growth while navigating the complexities of its current debt situation. As the negotiations continue, stakeholders are closely monitoring the company's decisions and the potential long-term impacts on both its capital structure and overall business strategy. With $9.1 billion in sales recorded in 2024 and operations across 59 facilities in 16 countries, Ardagh’s future strategies will be pivotal for its continued leadership in packaging solutions globally.