SCHEDULE: Ardagh Group Unveils Major Recapitalization and Ownership Shift

Ardagh Holdings S.A. and Ardagh Group S.A. detail a comprehensive recapitalization of Ardagh Group, including a significant ownership transfer and new debt issuance for Ardagh Metal Packaging S.A.

Summary

• Ardagh Holdings S.A. (AHSA) has become the 100% owner of Ardagh Group S.A. (AGSA), which indirectly holds 454,375,314 ordinary shares, representing 76.02% of Ardagh Metal Packaging S.A. (AMPSA) outstanding shares.
• The transaction is part of a comprehensive recapitalization of AGSA and its affiliates, involving the transfer of AHSA shares for approximately $300 million in cash.
• AGSA's shares were subsequently transferred to AHSA for no consideration, resulting from a Luxembourg share pledge appropriation.
• A new $1,500 million first lien senior secured debt (New Money Debt) will be issued, with proceeds used to pay advisor fees, discharge the Existing Apollo/AIHS Debt Facility, and for general corporate purposes.
• Existing Senior Secured Notes (SSNs) will be exchanged for new second lien takeback paper (Exchange SSNs) up to €1,229.15 million and $1,215.00 million, with interest payable semi-annually (cash and PIK options).
• Existing Senior Unsecured Notes (SUNs) will be equitized for 92.5% of EquityCo Shares, and Existing PIK Notes for 7.5% of EquityCo Shares, with early consent incentives for participating holders.
• The recapitalization includes the acquisition of shares in Yeoman Capital S.A. for $300 million cash.
• Various financial covenants and baskets, such as general debt, acquisition debt, and restricted payments, will be significantly reduced or made more restrictive compared to existing SSN indentures.
• The New York Litigation (Arini Credit Master Fund Limited et al v. Ardagh Group S.A. et al) will be stayed and voluntarily discontinued with prejudice upon the Closing Date, with litigation expenses reimbursed.
• A holding period trust will be established for EquityCo Shares of non-eligible holders for 12 months post-closing.
• The 'RemainCo Group' (ARD Holdings S.A. and its direct/indirect subsidiaries, excluding AMPSA and its subsidiaries) intends to initiate liquidation and/or winding up after the Closing Date.

Sentiment

Score: 6

Explanation: The filing outlines a complex, pre-negotiated recapitalization aimed at stabilizing the company's financial structure. While it addresses significant debt and legal issues, the conversion of debt to equity for some noteholders and the imposition of stricter financial covenants indicate a challenging financial position requiring substantial restructuring. The sentiment is neutral to slightly positive, reflecting a necessary step towards potential long-term stability rather than immediate growth or exceptional performance.

Positives

• The comprehensive recapitalization aims to stabilize the capital structure of Ardagh Group S.A. and its affiliates.
• The injection of $1,500 million in new first lien debt provides significant liquidity and addresses existing debt facilities.
• The equitization of existing SUNs and PIK notes reduces the overall debt burden and shifts a portion of the capital structure to equity.
• The resolution of the New York Litigation through a stay and eventual discontinuance removes a significant legal overhang.
• The establishment of a holding period trust for non-eligible holders ensures that all noteholders have an opportunity to receive their entitlements.

Negatives

• Existing SUN and PIK noteholders are converting debt to equity, which typically implies a haircut on their original investment and a shift to a higher-risk asset class.
• The reduction in various financial baskets (e.g., general debt, acquisition debt, restricted payments) and increased covenant restrictions may limit future operational and investment flexibility for the company.
• The 4% backstop fee for the New Money Debt, payable in kind, represents a cost to the company and dilution for existing equity holders.
• The complexity of the recapitalization, involving multiple debt instruments, consent solicitations, and potential schemes of arrangement, introduces execution risk.

Risks

• Failure to achieve required participation thresholds (e.g., 90% or 75% conditions) in the SSN Exchange Offer and Consent Solicitations could impede the recapitalization.
• Inability to obtain necessary regulatory and governmental approvals (Required Clearance) or third-party consents (Required Third-Party Consent) could delay or prevent the transaction.
• Legal or structural impediments arising during implementation could prevent, hinder, or delay the consummation of the Recapitalization Transaction.
• The issuance of any final, non-appealable ruling, judgment, decision, or order by a Governmental Body that enjoins or renders the transaction illegal or impossible.
• The company's board of directors may determine that proceeding with the Recapitalization Transaction is inconsistent with its fiduciary duties or applicable law, leading to termination.
• The 'RemainCo Wind-Down' process for certain subsidiaries post-closing could introduce unforeseen complexities or costs.

Future Outlook

The Reporting Persons intend to continuously review their investments in Ardagh Metal Packaging S.A. and may consider various strategic actions, including acquiring or selling additional shares, engaging in discussions with management and the board, or exploring extraordinary corporate transactions such as mergers, reorganizations, take-private transactions, asset sales, or changes to capitalization and management. The company aims to achieve a Share Quotation/Listing on an over-the-counter market within 60-90 days post-closing, with an eventual uplisting to a national securities exchange.

Management Comments

• The recapitalization transactions were effected by AGSA and its affiliates to achieve a comprehensive recapitalization of AGSA and certain of its affiliates.
• The company will use commercially reasonable efforts to obtain and maintain public corporate and notes ratings from Moodys and S&P, without obligation to achieve a specific rating.

Industry Context

This recapitalization reflects a broader trend in industries facing significant debt burdens or seeking to optimize their capital structures in challenging economic environments. The conversion of debt to equity for certain noteholders is a common strategy in such restructurings, aiming to reduce leverage and improve financial flexibility. The focus on new money debt and stricter covenants suggests a move towards a more conservative financial profile, which could be seen as a necessary step for long-term sustainability in the packaging industry.

Comparison to Industry Standards

• The shift from debt to equity for certain noteholders is a common feature in distressed or complex recapitalizations, similar to restructurings seen in other highly leveraged industrial companies.
• The introduction of more restrictive covenants and reduced financial baskets aligns with a trend towards tighter financial controls often imposed by new capital providers in recapitalized entities, aiming to protect their investment and ensure disciplined financial management.
• The $1,500 million new money debt and the 4% backstop fee are significant, reflecting the scale of the restructuring and the market's demand for compensation for providing capital in such a complex situation, comparable to other large-scale corporate turnarounds.

Corporate Governance

Legal Proceedings

• The New York Litigation (Arini Credit Master Fund Limited et al v. Ardagh Group S.A. et al, Index No. 651306/2025) is currently pending.
• The parties have agreed to execute and file a stipulation and proposed order to stay the New York Litigation until the Agreement Effective Period ends or a voluntary discontinuance with prejudice is filed upon the Closing Date.
• Litigation Expenses related to Relevant Litigation (including the New York Litigation) incurred by the Sponsor, Shareholder, and their Affiliates will be reimbursed on the Closing Date.

Related Party Transactions

• The recapitalization involves the transfer of all issued and outstanding shares of AHSA (formerly Yeoman Capital S.A.) to holders of certain indebtedness of AGSA and its affiliates, with an aggregate purchase price of approximately $300 million.
• Immediately following the acquisition of AHSA, all issued shares of AGSA were transferred to AHSA for no consideration, as a result of a Luxembourg share pledge appropriation instructed by certain noteholders.
• AGSA and the Issuer entered into a Shareholders Agreement on August 4, 2021, granting AGSA significant rights regarding board nominations and veto power over certain material actions, contingent on its ownership stake.
• Pledge agreements were entered into on November 12, 2025, where AGSA pledged shares in AGHS, which in turn pledged shares in Ardagh Investments Holdings Sarl, and Ardagh Investments Sarl pledged ordinary and preferred shares of the Issuer (AMPSA) as collateral for Group Debt.
• The New Money Debt will be fully backstopped by certain members of the SUN Group and SSN Group, who are also parties to the Transaction Support Agreement, and will receive a 4% backstop fee.

Stakeholder Impact

• **Shareholders (Existing AMPSA)**: The beneficial ownership of 76.02% by Ardagh Holdings S.A. (via AGSA) means a significant portion of AMPSA's control is now consolidated under the recapitalized Ardagh Group structure. Future strategic decisions will be heavily influenced by this controlling entity.
• **Existing Debt Holders (SUNs & PIK Notes)**: These holders are converting their debt into equity (92.5% and 7.5% of EquityCo Shares, respectively), indicating a significant change in their risk profile from creditors to equity owners. This typically involves a reduction in the face value of their original debt in exchange for potential upside in the restructured company's equity.
• **Existing Debt Holders (SSNs)**: These holders are exchanging their notes for new second lien notes, maintaining a debt position but with potentially altered terms, maturity, and security ranking.
• **New Money Debt Lenders**: These lenders are providing $1.5 billion in first lien debt, gaining a senior secured position and a 4% backstop fee, indicating a strong position in the new capital structure.
• **Management/Executives**: Retention arrangements are in place, capped at $2 million, to ensure continuity during the restructuring. Changes in corporate governance, particularly board composition, will affect management oversight.
• **Employees**: The filing does not directly address employee impact beyond retention arrangements, but a major recapitalization and potential wind-down of certain group entities could lead to organizational changes.
• **Customers/Suppliers**: The recapitalization aims to stabilize the company, which could provide greater certainty for ongoing business relationships, but the focus on financial restructuring may temporarily divert attention from operational enhancements.

Next Steps

• Parties to agree upon Definitive Documents by September 1, 2025.
• Company Parties to deliver draft Tax Structuring Paper and Implementation Steps Plan by August 11, 2025, and updated version by August 22, 2025.
• Launch the SSN Exchange Offer and Consent Solicitations to allow the Closing Date to occur on or before the Payment Deadline (September 30, 2025, extendable to October 31, 2025).
• Consummate the Recapitalization Transaction by the Outside Date of December 31, 2025.
• Make HSR Act filing within 20 Business Days after the Agreement Effective Date, if required.
• Obtain and maintain public corporate and notes ratings from Moodys and S&P within 30 days of the Closing Date.
• Cause shares to be quoted on an over-the-counter market within 60-90 days following the Closing Date, with eventual uplisting to a national securities exchange.
• Initiate liquidation and/or winding up of the 'RemainCo Group' following the Closing Date.

Key Dates

Keywords

Recapitalization, Debt Restructuring, SEC Filing, Schedule 13D, Ardagh Metal Packaging, Senior Secured Notes, Senior Unsecured Notes, PIK Notes, Equity Conversion, New Money Debt, Corporate Governance, Shareholder Agreement, Pledge Agreement, Legal Proceedings, Financial Covenants