#Luxembourg #Financial Strategy #Ardagh Group #recapitalization

Ardagh Group S.A. Announces Comprehensive Recapitalization Transaction

Ardagh Group S.A. (AGSA) has recently revealed a comprehensive recapitalization agreement aimed at addressing its financial obligations and ensuring long-term growth. This significant transaction involves collaboration with key financial stakeholders, including the controlling shareholder and creditors who collectively represent a substantial portion of the company's secured and unsecured notes.

Key Features of the Recapitalization Plan

The recapitalization strategy is structured to drastically reduce Ardagh’s debt through a debt-for-equity swap. This initiative will restructure approximately $4.3 billion in obligations, thus strengthening the Group's balance sheet. The Group's significant debt reduction will be coupled with an injection of $1.5 billion in new capital, maturing in December 2030. This capital will be used not only to refinance existing debts but also to cover the costs associated with the sale of Yeoman Capital S.A. to new equity holders and to support general corporate activities.

The bond maturities for Ardagh’s glass packaging segment will also be extended by over four years, providing better visibility and liquidity. It is noteworthy that both Glass and Metal packaging divisions will remain under the Ardagh Group umbrella.

Expected Completion of the Transaction

The recapitalization is projected to be finalized by September 30, 2025, contingent on regulatory approvals and customary conditions. If successfully executed, approximately 92.5% of the equity in the Group will be held by holders of the subordinate unsecured notes (SUNs), while the remaining 7.5% will be allocated to holders of PIK notes. Additionally, holders of the senior secured notes (SSNs) will receive new securities with second lien claims on the Group’s assets, further stabilizing their investment.

Milestones and Early Bird Fees

Key milestones will govern the transaction's execution. Stakeholders are encouraged to participate, with incentives such as early bird fees available for holders of SSNs and SUNs who comply with specified participation deadlines. This approach is aimed at ensuring a high level of stakeholder engagement and support.

Implications for Shareholders

For current shareholders, the recapitalization will result in a shift in ownership, effectively transferring control to a consortium of long-term investors, which includes major financial institutions. This transition is viewed as a strategic move to align the Group’s governance with stable investment sources and ensure operational continuity.

Forward-Looking Financial Performance

Looking ahead, Ardagh remains optimistic about its financial outlook. The company projects a steady increase in EBITDA from its Glass Packaging operations, anticipating approximately $660 million in FY25. Subsequent growth is expected in the following years, reinforcing confidence in the Group's overall profitability and expanding market margins. Capital expenditures are also anticipated to rise as the company invests in future growth opportunities.

Conclusion

Ardagh Group's recent recapitalization announcement marks a pivotal moment for the company as it seeks to navigate financial complexities while maintaining ownership over its core packaging businesses. The forthcoming adjustments aim to create a more resilient operational framework that can withstand market fluctuations and capitalize on growth opportunities. Stakeholders can find further details about the transaction through the company’s official channels and financial advisories.

For inquiries regarding the recapitalization process, stakeholders are encouraged to reach out to the designated financial advisors and legal teams involved in the transaction, ensuring all parties are well-informed and engaged throughout the upcoming changes.