Irish financier Paul Coulson’s Ardagh Group plans to buy €250 million of debt-equity hybrid notes in its Ardagh Metal Packaging (AMP) subsidiary at a time when the unit is preparing to buy back some of its own shares, which have slumped in value since floating in New York last summer.
The planned issuance of €250 million preferred shares, which must pay a 9 per cent annual dividend to Ardagh Group, is part of a series of funding developments announced by AMP on Wednesday. It comes as AMP, which makes cans for drinks from beer to wine spritzers, deals with rising raw material and energy costs even as underlying demand for its products is rising.
AMP also plans to raise $600 million (€560.2 million) of debt through the sale of senior secured green bonds to help fund an ongoing major investment plan.
In addition, it intends to increase the size of an existing loan facility to $400 million from $325 million currently, “reflecting growth in its business and higher commodity costs”.
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AMP, which is 75 per cent owned by Ardagh Group, has also decided to scale back its planned dividend payouts to shareholders to $240 million from $400 million. However, this is more than offset by a plan to buy back $200 million of its shares in a transaction that will see Ardagh Group’s stake rise marginally, as it is not taking part in the buyback plan.
Shares in AMP have fallen by more than 40 per cent since they floated in New York last August by way of a reverse takeover by a listed cash shell.
Meanwhile, AMP, which is in the middle of a major multiyear investment programme, said its expected investment spend this year will fall to $700 million from a figure of $1 billion that had been previously earmarked. This is a result of increase use of leasing and some re-phasing of projects in the pipeline.
