Financier Paul Coulson has said he would not have been able to build his Ardagh Group glass and metal packaging giant, which now has almost €8 billion worth of sales, without initial support from Anglo Irish Bank.
At an Institute of Directors lunch in Dublin on Friday, the businessman emerged as a rare voice to praise the now-defunct bank, which cost taxpayers almost €30 billion to rescue during the financial crisis, spurring the State into an international bailout.
“It would have been utterly impossible to build this business without Anglo’s support in the early years,” Mr Coulson said, adding that Ardagh decided to pay back its €450 million of borrowings from the ailing lender during the crisis as “we were facing a collapsing bank as a counterparty”.
Ardagh, which traces its routes to the former Irish Glass Bottle Company in which Mr Coulson bought an initial stake in 1998, turned to Anglo Irish for debt financing in 2005 as the group was in the early stages of transforming itself into one of the world’s largest packaging companies through acquisition.
However, Mr Coulson has mostly used the market for high-yield, or sub-investment grade, debt to expand. The company sold $4.5 billion of bonds in April to fund its biggest deal yet, the $3.4 billion (€3.05 billion) purchase of a beverage cans business from US packaging company Ball Corp and British peer Rexam, and refinanced higher-cost debt.
The group had a total of €8 billion of total borrowings at the end of June. Last week, it sold a further $1.715 billion of debt, known as payment-in-kind notes, which allow companies to defer cash payments if needed to refinance further loans and return €270 million of capital to shareholders.
“The high-yield market is where we successfully made our home,” Mr Coulson said, adding that using this marking, in Europe since 2002 and the US since 2010, had allowed Ardagh “to borrow money at rates, in quantities that perhaps we wouldn’t otherwise have been able to do”.
However, the company, which last raised equity in 2005 when the business was capitalised at €21 million, plans to finally float on the New York Stock Exchange in the first half of next year, initially selling about a 5 per cent stake to raise about €270 million.
Mr Coulson told attendees at the lunch on Friday that the group planned to put further mergers and acquisition (M&A) deals on hold until after the initial public offering. “Will there be future M&A activity? I think the answer to that is yes, but it will not be for the time being,” he said. “The focus now is very much getting [the operating company] listed and also on reducing debt.”
He said company to be floated planned to pay dividends to shareholders, including its ultimate holding company, from the outset of its life as a listed company.
Mr Coulson, who owns 36 per cent of the group, criticised former British prime minster David Cameron for what he termed an "incredibly dangerous decision" to call a referendum in June on leaving the European Union without fully understanding the effects of the outcome. He said the decision had put at risk huge amounts of foreign direct investment into Britain, while also having serious implications for Northern Ireland, the Republic and wider European project.
“It is very hard to see how Britain is going to get a better deal,” said Mr Coulson, adding that the UK was “complacent and in denial” about the impact Brexit would have on it.
