Latest news with #creditors
Irish Times
9 hours ago
- Business
- Irish Times
Paul Coulson offered $250m to walk away from Ardagh amid crunch debt talks
Businessman Paul Coulson has been offered $250 million (€218 million) by bondholders in Ardagh Group to walk away from the packaging empire he built over the past 25 years, as debt restructuring talks enter a crunch phase. The offer would see Mr Coulson cede control of the glass and metal containers giant, which has about $12.5 billion of borrowings, and abandon previous notions of retaining control of its prized Ardagh Metal Packaging (AMP) arm, the sources said. The proposal is one of a number of potential debt solutions under discussion in parallel with the company, a source said. All involve substantially addressing about $2.5 billion of bonds that fall due in August 2026 and would involve the injection of new money into the business, the source added. Bloomberg first reported the offer for Mr Coulson to hand over entire control of Ardagh Group to certain bondholders, indicating it is the most likely outcome even as a number of alternatives remain in play. READ MORE Under the proposal, unsecured creditors would take a majority stake in the group after the overhaul, Bloomberg reported. Secured creditors would have their debt reinstated at par, and receive a double-digit coupon, it said. A spokesman for Ardagh Group declined to comment on the current state of talks. [ Ardagh talks with creditor group break down over improving cans unit Opens in new window ] The development comes weeks after Ardagh Group walked away from talks with unsecured bondholders, who were being asked by the group to write off much of the $2.32 billion they are owed in exchange for taking full ownership of the glass containers part of the business. Mr Coulson had envisaged Ardagh Group spinning its shares the valuable AMP division into a new company (NewCo) that would be 80 per cent owned by Mr Coulson and other existing Ardagh Group shareholders. He proposed that unsecured creditors would only receive 20 per cent of the division. Ardagh Group currently owns 76 per cent of New York-listed AMP. Bobby Healy on why Manna drone delivery could be the 'biggest technology company in the world for its space' Listen | 67:08 Ardagh Group, which Mr Coulson built into one of the world's largest packaging companies through a series of debt-fuelled acquisitions, said more than a year ago that it was considering options to lower its $12.5 billion debt pile. The burden had become increasingly unsustainable in recent years amid weaker-than-expected earnings. Talks with the senior unsecured creditors became more complicated when Ardagh Group said in April that the beverage cans unit had turned a corner', helped by a rebound in activity across the energy drinks, sparkling water and health and wellness categories. [ Ardagh enlists restructuring experts to board as it looks to cut €12bn debt Opens in new window ] AMP reported its revenues grew by 11 per cent year-on-year in the first quarter to $1.27 billion and upgraded its full-year earnings forecast. However, Ardagh Group's legacy glass business saw its revenues drop 6.7 per cent to $961 million during the quarter as this arm of the group continued to struggle. Meanwhile, holders of some $1.8 billion of risky bonds issued by a holding company above the operating Ardagh Group are expected to lose almost all of what they are owed. These bonds are currently trading at about 4 per cent of their original value. Mr Coulson controls Ardagh Group through an 18.8 per cent direct stake in its ultimate parent company and a 52.4 per cent interest in a vehicle called Yeoman Capital, which owns 33.9 per cent of the group. He effectively owns 36.6 per cent of the equity in a business that traces its roots to the Irish Glass Bottle Company, founded in Dublin in 1932.
Times
10 hours ago
- Business
- Times
Thames Water given special administration warning by minister
The government has given the strongest indication yet that it is preparing to put Thames Water into administration. Answering questions in the Commons, Steve Reed the environment secretary, was asked to comment on backbench unease that a consortium plotting a takeover of Thames Water is lobbying Ofwat, the regulator, to ease up on the fines and penalties it is levying against the company for past misdemeanours and ongoing poor performance. In response Reed told MPs: 'Thames Water must meet its statutory and regulatory obligations to their customers and to the environment. It is only right that the company is subject to the same consequences as any other water company.' He continued: 'The company remains financially stable but we've stepped up our preparations and stand ready for all eventualities, as I've said before, including [a] special administration regime if that were to become necessary.' A special administration regime is the option of last resort for the troubled company and would involve the appointment of professional accountants and be likely to wipe out all creditors in an attempt to refinance the business. A consortium of creditors of Thames Water who are already propping up the £19.25 billion in-debt London and Thames Valley supplier, have proposed a £5 billion refinancing over and above £3 billion of bridging loans that are currently keeping the company in business. However, those creditors have made it plain that their proposals can work only if Ofwat is prepared to offer a 'recalibration' of Thames Water's five-year funding settlement and performance targets. As the settlement currently stands, which demands reductions in environmentally-damaging pollution incidents and wasteful mains leakage plus other metrics, Thames could face up to £1 billion of fines and penalties for not hitting the targets in the coming years. The creditors plotting the takeover include major UK institutions such as Aberdeen, Invesco and M&G, large international finance houses such as BlackRock and Apollo, as well as distressed-debt dealers such as Elliott and Silver Point Capital. They have stepped in after the infrastructure investment arm of KKR, the American private equity house, walked away last month from a £4 billion recapitalisation plan. A spokesman for the creditors backing the takeover said: 'Broad regulatory support is needed to unlock a market-led solution for Thames Water that will secure billions of pounds in fresh investment for its ageing network. 'This investor group is committed to working with the government and regulators to agree a pragmatic plan that recognises what Thames Water can realistically deliver and they expect to be held accountable for an ambitious trajectory for the company's return to compliance. 'More than £10 billion would be written-off to get the company back to investment grade, expected to be the largest financial loss on an infrastructure asset in British history.'
Bloomberg
11 hours ago
- Business
- Bloomberg
Irish Billionaire Coulson Nears Deal to Cede Ardagh to Creditors
Paul Coulson is nearing an agreement to hand creditors full control of Ardagh Group SA, the company he transformed into a global metal and glass packaging giant. The Irish billionaire is finalizing the details of a deal that would see him receive a one-off payment of about $250 million in exchange for handing over the company to debtholders after months of fraught negotiations, according to people familiar with the matter, who asked not to be named because they aren't authorized to speak publicly.
The Independent
12 hours ago
- Business
- The Independent
Government will not be lenient with Thames Water creditors, suggests Reed
Environment Secretary Steve Reed has suggested that the Government will reject calls from Thames Water creditors for leniency from fines and penalties. Taking questions in the Commons on Tuesday, Mr Reed said the Government had 'stepped up our preparations and stand ready for all eventualities', amid Thames Water's search for a rescue plan. The troubled utility company's lenders put forward proposals to pump cash into it. But they have also demanded leniency from regulators over performance targets and fines for environmental failings. The creditors argue that without regulatory leniency, the utility's 'pollutions, asset health deterioration, and customer service levels are likely to worsen'. Labour MP for Monmouthshire, Catherine Fookes, told the Commons: 'I am really concerned by reports of Thames Water seeking regulatory easements. 'Can the Secretary of State assure me that this Government will continue to crack down on water pollution from all sources, including in the Wye and the Thames and all across the UK?' Mr Reed replied: 'The Government will always act in the national interest on these issues. 'Thames Water must meet its statutory and regulatory obligations to their customers and to the environment. 'It is only right that the company is subject to the same consequences as any other water company. 'The company remains financially stable, but we've stepped up our preparations and stand ready for all eventualities, as I've said before, including a special administration regime if that were to become necessary.' It comes after US private equity giant KKR recently pulled out of a rescue deal to inject much-needed cash into Britain's biggest water supplier, which has 16 million customers and is sinking under £19 billion of debt. The move threw the future of Thames Water into doubt once more and raised the threat of temporary nationalisation by the Government if a deal cannot be agreed. A Thames Water spokesperson said: 'Thames Water is committed to improving outcomes for the environment and its customers. 'We are investing billions of pounds in our network and any recapitalisation of the business will need to ensure that is maintained for the benefit of all our stakeholders. 'Our focus remains on a holistic and fundamental recapitalisation, delivering a market-led solution which includes targeting investment grade, credit ratings.' The creditors are the bondholders who now effectively own Thames Water after the High Court, earlier this year, approved a financial restructuring through a loan of up to £3 billion to ensure it can keep running until the summer of 2026. As part of their plans, the creditors would commit to spending £20.5 billion over the next five years, as agreed under the current five-year plan with Ofwat. But they are calling for a 'pragmatic approach' to regulation – including 're-basing incentives and performance targets' – and 'realistic levels of compliance'. It is understood they have been holding intensive talks with regulator Ofwat in the hope of securing approval for their deal in early July. A spokesman for the creditors said: 'Broad regulatory support is needed to unlock a market-led solution for Thames Water that will secure billions of pounds in fresh investment for its aging network, allowing a world class leadership team to start the intensive turnaround and deliver better outcomes for customers and the environment. 'This investor group is committed to working with the Government and regulators to agree a pragmatic plan that recognises what Thames Water can realistically deliver and they expect to be held accountable for an ambitious trajectory for the company's return to compliance. 'More than £10 billion would be written off to get the company back to investment grade, expected to be the largest financial loss on an infrastructure asset in British history.'
Yahoo
12 hours ago
- Business
- Yahoo
Government will not be lenient with Thames Water creditors, suggests Reed
Environment Secretary Steve Reed has suggested that the Government will reject calls from Thames Water creditors for leniency from fines and penalties. Taking questions in the Commons on Tuesday, Mr Reed said the Government had 'stepped up our preparations and stand ready for all eventualities', amid Thames Water's search for a rescue plan. The troubled utility company's lenders put forward proposals to pump cash into it. But they have also demanded leniency from regulators over performance targets and fines for environmental failings. The creditors argue that without regulatory leniency, the utility's 'pollutions, asset health deterioration, and customer service levels are likely to worsen'. Labour MP for Monmouthshire, Catherine Fookes, told the Commons: 'I am really concerned by reports of Thames Water seeking regulatory easements. 'Can the Secretary of State assure me that this Government will continue to crack down on water pollution from all sources, including in the Wye and the Thames and all across the UK?' Mr Reed replied: 'The Government will always act in the national interest on these issues. 'Thames Water must meet its statutory and regulatory obligations to their customers and to the environment. 'It is only right that the company is subject to the same consequences as any other water company. 'The company remains financially stable, but we've stepped up our preparations and stand ready for all eventualities, as I've said before, including a special administration regime if that were to become necessary.' It comes after US private equity giant KKR recently pulled out of a rescue deal to inject much-needed cash into Britain's biggest water supplier, which has 16 million customers and is sinking under £19 billion of debt. The move threw the future of Thames Water into doubt once more and raised the threat of temporary nationalisation by the Government if a deal cannot be agreed. A Thames Water spokesperson said: 'Thames Water is committed to improving outcomes for the environment and its customers. 'We are investing billions of pounds in our network and any recapitalisation of the business will need to ensure that is maintained for the benefit of all our stakeholders. 'Our focus remains on a holistic and fundamental recapitalisation, delivering a market-led solution which includes targeting investment grade, credit ratings.' The creditors are the bondholders who now effectively own Thames Water after the High Court, earlier this year, approved a financial restructuring through a loan of up to £3 billion to ensure it can keep running until the summer of 2026. As part of their plans, the creditors would commit to spending £20.5 billion over the next five years, as agreed under the current five-year plan with Ofwat. But they are calling for a 'pragmatic approach' to regulation – including 're-basing incentives and performance targets' – and 'realistic levels of compliance'. It is understood they have been holding intensive talks with regulator Ofwat in the hope of securing approval for their deal in early July. A spokesman for the creditors said: 'Broad regulatory support is needed to unlock a market-led solution for Thames Water that will secure billions of pounds in fresh investment for its aging network, allowing a world class leadership team to start the intensive turnaround and deliver better outcomes for customers and the environment. 'This investor group is committed to working with the Government and regulators to agree a pragmatic plan that recognises what Thames Water can realistically deliver and they expect to be held accountable for an ambitious trajectory for the company's return to compliance. 'More than £10 billion would be written off to get the company back to investment grade, expected to be the largest financial loss on an infrastructure asset in British history.'
