Ardagh Group S.A. provides an update on discussions with noteholders

LUXEMBOURG, March 11, 2025 /PRNewswire/ -- Ardagh Group S.A. ("AGSA" or the "Company") is engaging in negotiations with certain holders of its Senior Secured Notes ("SSNs") and Senior Unsecured Notes ("SUNs") who comprise two separate ad hoc groups of AGSA's debt. A group owning a majority of the SUNs are represented by Akin Gump Strauss Hauer & Feld LLP and PJT Partners ("SUN Group"). Another group owning a majority of the SSNs are represented by Gibson, Dunn & Crutcher LLP and Perella Weinberg Partners ("SSN Group").

The Company's latest proposal to both the SUN Group and the SSN Group included the following key terms for a fully consensual transaction:

• a potential divestment (subject to AGSA board approval) of the ordinary shares in Ardagh Metal Packaging S.A. ("AMP") and the preferred equity in AMP currently held indirectly by AGSA ("AMP Pref Equity") (together the "AMP Interests") to a new special purpose vehicle holding structure ("New BidCo") owned by existing indirect shareholders of AGSA and by participating holders of the SUNs;
• the exchange of the SSNs in full into (i) $1,942 million of new senior secured debt at AGSA, which would have second-out priority in respect of security enforcement proceeds only, would mature in 2030, bear interest at 6.0% cash and 6.0% PIK interest, and would have call protection of NC2, 50%, 25%, Par (the "AGSA Exchange SSNs"); and (ii) a new $550 million senior secured debt instrument at New BidCo, with first-out priority in respect of enforcement proceeds of security granted over substantially all the assets of New BidCo, which would mature in 2030, bear 12.0% cash interest, and have call protection of NC2, 50%, 25%, Par (the "New BidCo Debt");
• existing holders of SSNs and SUNs would be entitled to participate in a $1,200 million super senior new money facility at AGSA (the "AGSA New Money"), which would benefit from first-out priority in respect of security enforcement proceeds only. $400 million would be applied towards general corporate purposes and $800 million would be applied towards the refinancing of Ardagh Investments Holdings Sarl's ("AIHS") existing term loan facility (the "AIHS Facility") following the repayment of the intercompany loan from AIHS to AGSA. The facility would mature in 2030 (with call protection of NC2, 50%, Par and a bankruptcy-proof make-whole), bear 8.5% cash interest, and would be backstopped by the SSN Group and the SUN Group in exchange for a 5.0% backstop fee payable in kind;
• the consideration for the sale of the AMP Interests to New BidCo would comprise: (i) $550 million of SSNs being exchanged into the New BidCo Debt, (ii) a $813 million new preferred equity instrument issued by New BidCo to AGSA, which would receive a put option exercisable in 2030 (the "New BidCo Pref A"), and which would be pledged as collateral to the senior secured creditors at AGSA, and (iii) the partial exchange of SUNs into a $771 million new preferred equity instrument issued by New BidCo to holders of the SUNs, which would receive a put option exercisable in 2030 (the "New BidCo Pref B"). The New BidCo Pref A and New BidCo Pref B interest rates would be sized to ensure New BidCo remains cash neutral based on cash proceeds to New BidCo through dividends from AMP ordinary shares and dividend income from the AMP Pref Equity;
• the collateral for the AGSA Exchange SSNs and the AGSA New Money would be enhanced by the addition to the existing collateral of security over currently unpledged assets including over the Ardagh Glass Packaging Africa group (directly or indirectly) and the New BidCo Pref A, and other assets where practicable;
• participating holders of SUNs would receive all the pro forma equity in AGSA, as well as 20% of the pro forma equity in New BidCo; New BidCo would be incorporated by certain existing shareholders of AGSA who would hold 80% of the pro forma equity of New BidCo and those holders would also receive $57 million of New BidCo Pref B; and
• consideration to be provided to the holders of the senior secured toggle notes due 2027 issued by ARD Finance S.A. ("PIK Notes") to be agreed from the SUN recovery.

The Company, the indirect majority shareholder, and the SUN Group have since been progressing discussions on the SUN Group's counterproposal (the "SUN Group Counterproposal") based upon an agreement in principle on the following key terms among the indirect majority shareholder, and a majority of the SUN Group, subject to resolution of open issues and agreement on definitive documents:

• a potential divestment (subject to AGSA board approval) of the AMP Interests to New BidCo owned by existing indirect shareholders of AGSA and by participating holders of the SUNs;
• the partial exchange of the SSNs into (i) up to $1,142 million of takeback debt at AGSA, which would have second-out priority, would mature in 2030, and bear interest at an annual rate of 9.00%, of which 4.00% would be payable in cash and 5.00% in-kind, (ii) $780 million of takeback debt at New BidCo, which would mature in 2030 and bear interest at an annual rate of 6.25% cash (the "New BidCo Exchange Instrument"), and (iii) $570 million New BidCo Pref A shares, which under the SUN Group Counterproposal would receive a put option exercisable in 2030 and pay a cash dividend at an annual rate of 9.125%;
• the partial exchange of the SUNs into $784 million in New BidCo Pref B, which under the SUN Group Counterproposal would receive a put option exercisable in 2030, and would pay a cash dividend at an annual rate of 12.5%. Participating SUN holders would also receive 100% of the equity in AGSA and 20% of the pro forma equity in New BidCo;
• to the extent, due to holders of fewer than 100% of SSNs participating, there is residual capacity under the New BidCo Exchange Instrument and New BidCo Pref A, participating SUNs would be entitled to exchange pro rata at par into such unutilised capacity in the New BidCo Exchange Instrument until $780 million is fully allocated and then in the New BidCo Pref A, until $570 million is fully allocated. Thereafter, remaining participating SUNs would be entitled to exchange at par into New BidCo Pref B until $784 million is fully allocated. Remaining participating SUNs would equitise into 100% of AGSA equity;
• any SUNs or SSNs that do not participate in the foregoing exchanges would remain outstanding;
• certain of the existing SSN and/or SUN holders would be entitled to participate in a $1,200 million priority new money facility (the "Priority Facility"). The Priority Facility would benefit from first-out priority. Proceeds would be applied towards general corporate purposes and for the refinancing of the AIHS Facility (via repayment of the existing intercompany balance). The annual interest rate on the Priority Facility would be 8.50%, payable in cash, and it would mature in 2030. Certain SSN and/or SUN holders would backstop such facility in exchange for a 5.0% backstop fee payable in kind;
• participating holders of SUNs would receive 100% of the equity in AGSA, as well as 20% of the pro forma equity in New BidCo; New BidCo would be incorporated by certain existing shareholders of AGSA who would hold 80% of the pro forma equity of New BidCo and those holders would also receive $57 million of New BidCo Pref B;
• the consideration for the sale of the AMP Interests to New BidCo would comprise: (i) $780 million of SSNs being exchanged into the New BidCo Exchange Instrument, (ii) $570 million of SSNs being exchanged into New BidCo Pref A, and (iii) a partial exchange of $784 million of the SUNs into $784 million in New BidCo Pref B issued by New BidCo to holders of the SUNs, which would rank junior to the New BidCo Pref A; and
• consideration to be provided to the holders of the PIK Notes to be agreed.

The Company continues to engage in constructive discussions with the SUN Group and the SSN Group with a view to agreeing and executing a consensual restructuring transaction. The Company will provide further updates in due course.

The Company also provided an update on its current projections of operating and financial performance between FY25 and FY27 in respect of its global glass packaging operations ("Glass Packaging"). Shipments across Glass Packaging are projected to rise by an aggregate low single digit percentage between FY24 and FY27, with an aggregate mid-to-high single digit percentage growth in the Europe & Africa segment partly offset by an aggregate high single digit percentage decline in the North America segment. Shipment mix and regional segment contribution is expected to remain broadly in line with historical patterns, except for North America where a higher percentage contribution from the Food and Spirits end-use categories, and a reduced contribution from the Beer and Wine end-use categories, is forecasted, in part reflecting 2024 footprint actions. The Company currently projects¹ Adjusted EBITDA in FY25E to be approximately $640 million, increasing to approximately $700 million and $740 million, in FY26E and FY27E, respectively, resulting in a gradual improvement in global EBITDA margins from 2024 levels, though remaining below pre-pandemic levels. This compares with approximately $602 million of EBITDA which the Company reported in respect of FY24, representing a margin of approximately 14% on revenues of approximately $4.2 billion. Capital expenditures are expected to be approximately $300 million in FY25E, increasing to $360-380 million annually in FY26/27E. Lease repayments are expected to range from $110 million to $120 million annually over the forecast period, with other flows, principally in respect of working capital and cash taxes, expected to be, in aggregate, $100 million in 2025, rising to $130 million in 2027. The above projections do not include ongoing dividend payments from AMP. 

Further to the announcement of 15 April 2024, the Company also discloses in relation to the AIHS Facility (referred to as the "Initial Term Loan" in the announcement dated 15 April 2024) that there is a prepayment premium on the facility if refinanced before 13 June 2025, and it is callable at a price of 102 and 101, for the subsequent years.

With regards to the South African Rand Senior Facilities, the Company also discloses that such facilities have been entered into by subsidiaries owned by Ardagh Glass Packaging Holdings Mauritius Limited in the AGSA restricted group. Furthermore, the Company discloses that Ardagh Glass Packaging Group Sarl is the holding company directly owned by Ardagh Group S.A.

AGSA reported cash and available liquidity of $1.5 billion on December 31, 2024.

Disclaimer

This release does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor will there be any sale of securities referred to in this announcement, in any jurisdiction, including the United States, in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. Securities may not be offered or sold in the United States absent registration under the U.S. Securities Act of 1933, or an exemption from registration.

This release contains "forward-looking" information. The forward-looking information is based upon certain assumptions about future events or conditions and is intended to illustrate hypothetical results under those conditions. Actual events or conditions are unlikely to be consistent with, and may materially differ from, those assumed. Any views or opinions expressed in this release (including statements or forecasts) constitute the judgement of the Company as of the date of this material and are subject to change without notice. You are cautioned not to place undue reliance on any forward-looking information.

Any projections or forecasts in this release are illustrative only and have been based on the estimates and assumptions when the Company's business plan was prepared. Such estimates and assumptions may or may not prove to be correct. These projections do not constitute a forecast or prediction of actual results and there can be no assurance that the projected results will actually be realized or achieved. Actual results may depend on future events which are not in the Company's control and may be materially affected by unforeseen economic or other circumstances.

¹  Based on budgeted 2025 exchange rates of EUR/USD of 1.06 and USD/ZAR of 18.0

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SOURCE Ardagh Group S.A.