#Senior Secured Notes #Luxembourg #Ardagh Group #Financial Strategies

Ardagh Group S.A.: Key Developments on Debt Negotiations

Overview of Current Negotiations

Ardagh Group S.A. (referred to as AGSA) is currently in active discussions with holders of its Senior Secured Notes (SSNs) and Senior Unsecured Notes (SUNs). This complex negotiation involves two distinct ad hoc groups representing vast portions of AGSA's outstanding debt, each mediated by different legal and financial advisors. The SUN group is represented by Akin Gump Strauss Hauer & Feld LLP and PJT Partners, while the SSN group engages Gibson, Dunn & Crutcher LLP and Perella Weinberg Partners.

Proposed Key Terms

The latest proposals from the company aim for a fully consensual transaction, which includes several important adjustments to AGSA's financial structure. These adjustments could involve:

• - Divestment of Interests: AGSA might divest its ordinary shares and preferred equity interests in Ardagh Metal Packaging S.A. (AMP) to a new special purpose vehicle owned partly by existing shareholders and participating holders of the SUNs.
• - Debt Restructuring: A transformative exchange of SSNs into new debt instruments – a total of $1,942 million in newly structured SSNs at AGSA is anticipated, to be complemented by $550 million of new senior secured debt at the newly formed entity, New BidCo.
• - Additionally, existing noteholders would have the opportunity to participate in a $1,200 million super senior new money facility at AGSA.

Financial Growth Projections

In conjunction with its negotiation updates, AGSA has shared optimistic projections for its operating performance between FY25 and FY27. The company anticipates:

• - An increase in shipments across its global glass packaging operations by a low single-digit percentage overall, with particular growth projected in Europe and Africa, despite a decline in North America.
• - Expected Adjusted EBITDA for FY25 is around $640 million, which is predicted to grow to $700 million and $740 million in FY26 and FY27 respectively.
• - Operating margins are projected to gradually improve, yet they will still be lower than pre-pandemic levels.

Capital expenditures are estimated to be approximately $300 million in FY25, with a rise to as much as $380 million by FY27. These plans do not account for ongoing dividend payments from AMP, indicating a focus on strengthening AGSA’s balance sheet during these aggressive restructuring efforts.

Summary of Strategic Direction

AGSA is heavily invested in ensuring a favorable outcome from these discussions with its noteholders. The intent is to forge agreements that not only stabilize its debt obligations but also pave the way for enhanced operational capabilities and financial flexibility moving forward. As negotiations progress, further updates will be provided, reflecting AGSA's commitment to transparency during this crucial period.

In light of the anticipated economic environment and internal strategic priorities, AGSA is positioned for continued engagement with its stakeholders, aiming for a cohesive restructuring transaction that meets the interests of all parties involved. This ongoing evolution in leadership and financial strategy underscores AGSA’s resilience and proactive approach to navigating complex financial landscapes.