Ardagh Group, which manufactures metal and glass containers and is led by Dubliner Paul Coulson, moved on Friday to launch a bond deal to boost its cash position amid turmoil caused by Covid-19, even though the company said its trading during the first quarter was in line with expectations.
The New York-listed group is offering $500 million (€464 million) of senior secured notes that will mature in 2025, with $300 million earmarked to repay a term loan credit facility drawn down on March 23rd. The remainder will boost the company’s cash and committed liquidity levels to $1.3 billion.
Ardagh said it expected to report adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) for the first quarter of 2020 in line with its guidance of $270 million, with “no material impact from the recent outbreak of Covid-19 during the quarter”.
“Overall demand has remained resilient to date, reflecting our focus on the beverage and food end use categories,” it said. “Operationally, we are a core part of the supply chain and all our production facilities have continued to operate normally. Our supply chains have also continued to function satisfactorily to date.”
However, Ardagh said that restrictions on travel, the imposition of quarantines and prolonged closures of workplaces and other businesses, including hospitality, leisure and entertainment outlets, and the related cancellation of events as governments globally sought to contain the spread of coronavirus, may impact it in a number of ways.
“This is expected to include an adverse effect from reduced global economic activity and resulting demand for our customers’ products and, therefore, the products we manufacture,” it said. “It may also adversely affect our ability to operate our business, including potential disruptions to our supply chain and workforce. The Covid-19 impact on capital markets could also impact our cost of borrowing.”
