Deutsche Bank Challenges Ardagh’s $10 Billion Debt Restructuring Plan

Major Creditors Challenge Packaging Giant’s Restructuring

Deutsche Bank and activist hedge fund Carronade Capital are reportedly attempting to block a $10 billion restructuring deal between Irish billionaire Paul Coulson and the majority of Ardagh Group’s bondholders, according to financial industry sources. The Luxembourg-based packaging giant, one of the world’s largest producers of glass and metal drinks containers, announced the comprehensive restructuring agreement in July following extended negotiations with creditors.

Restructuring Terms and Shareholder Compensation

Under the proposed terms, Paul Coulson—a former accountant known as “The Cooler” in his native Ireland—would cede control of Ardagh to a group of bondholders through a debt-for-equity swap. Reports indicate shareholders would receive $300 million as part of the arrangement, with just over $100 million reportedly allocated to Coulson personally. This transition marks a significant shift for the company Coulson built through a series of leveraged buyouts into one of Europe’s most prominent packaging groups.

Controversial PIK Bond Treatment

The restructuring deal would completely write off the group’s riskiest $1.7 billion in payment-in-kind bonds, which can pay interest in the form of additional debt, in exchange for a 7.5 percent stake in the business. Sources familiar with the matter indicate that Deutsche Bank and Connecticut-based Carronade together own approximately 13 percent of this PIK debt. These dissenting debtholders are seeking to block the restructuring, believing it disadvantages them in favor of other creditors and shareholders., according to industry analysis

Path Forward and Voting Requirements

According to the report, Ardagh requires consent from at least 90 percent of all classes of security to implement the deal consensually. The company’s end-of-September announcement indicated it had secured nearly 100 percent support from senior secured and senior unsecured bondholders but only approximately 82 percent backing from PIK holders. Analysts suggest that since the deal has more than 75 percent support across all security classes, Ardagh could potentially force through the transaction using an in-court restructuring process such as a UK-based scheme of arrangement.

Additional Financial Arrangements

The comprehensive restructuring plan also includes $1.5 billion in new funding from bondholders and full repayment of a loan provided by Apollo Global Management last year. Control would transfer from shareholders to Ardagh’s unsecured bondholders, including London’s Arini Capital Management—founded by former Credit Suisse trader Hamza Lemssouguer—and US-based Canyon Partners. Despite the opposition from some PIK bondholders, sources involved in the restructuring reportedly expressed confidence that the deal would not be delayed., according to market analysis

Industry Context and Challenges

Ardagh has faced significant financial pressure from rising interest rates and energy costs, compounded by billions of dollars in upcoming debt maturities. The company’s situation reflects broader challenges in the packaging industry and highly leveraged corporate structures. Paul Coulson, who controls more than 50 percent of the company’s voting rights but holds a 36 percent economic stake, earned his reputation as a significant figure in the European junk bond market through aggressive expansion strategies.

Ardagh, Deutsche Bank, and Carronade have all declined to comment on the ongoing restructuring negotiations, according to reports.

References & Further Reading

This article draws from multiple authoritative sources. For more information, please consult:

• http://en.wikipedia.org/wiki/Ardagh,_County_Longford
• http://en.wikipedia.org/wiki/Deutsche_Bank
• http://en.wikipedia.org/wiki/Bond_(finance)
• http://en.wikipedia.org/wiki/Shareholder
• http://en.wikipedia.org/wiki/Creditor

This article aggregates information from publicly available sources. All trademarks and copyrights belong to their respective owners.

Note: Featured image is for illustrative purposes only and does not represent any specific product, service, or entity mentioned in this article.