DUBLIN-BASED manufacturing group Ardagh Glass, which is controlled by businessman Paul Coulson, plans to raise €300 million from the sale of bonds due in 2016 to restructure the company’s debts.
The aim of the proposed bond sale is to improve “liquidity headroom” for general business purposes and to push out the dates of loans falling due by swapping existing bank debt for longer-term debt sourced in the bond markets.
The company plans to refinance €150 million of senior secured term loans with a final maturity in 2014 and to repay debts owing under the company’s senior secured revolving credit facilities.
Ratings agency Moody’s assigned a provisional Ba3 rating to the proposed €300 million sale of the seven-year bonds and affirmed the firm’s overall rating, saying it expected “a gradual recovery” in earnings following a weak first quarter of the year.
Moody’s said that earnings were affected by lower volumes and substantial restructuring costs, but that it expects earnings to stabilise in the second half of this year.
The agency expects Ardagh to generate positive cashflow through 2009, supported by “an unwinding of working capital” and a reduction of capital expenditure.
The collateral guaranteeing the new bonds will comprise the same assets securing the company’s existing senior secured credit facility with the exception of certain charges on land in Germany.
Ardagh Glass operates 20 manufacturing facilities in seven countries. The company, which was established as the Irish Glass Bottle Company in 1932, employs more than 6,500 people and produces more than 12 billion glass containers every year.
The group’s turnover increased by 58 per cent to just over €1 billion in 2007, the most recent year for which public accounts are available, and made an operating profit of €55.5 million during the year.
The company is currently locked in a dispute with Quinn Glass, part of the Quinn Group.
English local authority Cheshire West and Chester Council has served an enforcement notice on Quinn Glass Ltd ordering it to cease production at its Elton factory near Chester within nine months.
The move follows an action taken in the English high court by Ardagh Glass UK, which argued that Quinn Glass did not have full planning permission for the Elton facility. The order also requires demolition of the factory within 18 months.
Quinn has challenged the order and lodged an appeal.
