Paul Coulson, often described as a titan of industry and one of the godfathers of European leveraged finance, has concluded his remarkable journey with Ardagh, the global glass and metal packaging giant he meticulously built. His strategic departure marks the end of an era defined by aggressive financial engineering and an astute ability to leverage cheap corporate debt to fund an empire.
The origins of this industrial saga are far from glamorous. It began on a bleak, freezing evening in January 2003, amidst traveller encampments and an almost deserted car park at the former Irish Glass Bottle manufacturing complex in Dublin’s Ringsend. Coulson, naturally media-averse, was already orchestrating his ambitious plan to take Ardagh private, aiming to separate the burgeoning glass packaging operations from the disused Ringsend property.
A former PwC accountant, Coulson had steadily built his stake in Ardagh through his finance company, Yeoman. His ingenuity was evident in the turnaround of Ardagh’s fortunes, significantly bolstered by the strategic acquisition of Rockware Glass in the UK. He offered shareholders a choice: a cash payout or shares in the newly privatized entity, subtly urging them to stay invested, foreseeing greater value beyond the immediate exit opportunity for venture capital firms.
Fast forward approximately 22 years, Coulson’s exit from Ardagh is reportedly yielding him an astounding €650 million. Under his relentless drive, Ardagh transformed into one of the largest glass and metal packaging companies worldwide, a testament to his vision and daring financial acumen. This remarkable success cemented his reputation in the high-stakes world of leveraged finance.
Coulson’s masterful command of the corporate bond market was central to Ardagh’s exponential growth. He consistently tapped into declining corporate bond yields, securing access to cheap debt that fueled billions of dollars worth of acquisitions in both glass and metal packaging sectors. This strategy not only expanded the business significantly but also allowed him to extract substantial dividends, showcasing a bold approach to capital management.
The company’s capital structure became increasingly intricate under his stewardship, a result of raising complex forms of debt. Notably, much of this debt was in the form of “payment-in-kind” (PIK) notes, which permitted interest payments with further debt rather than cash. The controversial “super PIK” in 2018, which exclusively met interest payments with fresh debt and directed proceeds to shareholders, drew strong rebukes from ratings agencies like Moody’s due to the escalating debt load.
However, the financial landscape shifted. As interest rates began to edge higher and energy costs surged, the value of more risky bonds plummeted, leading to a precarious situation. Coulson attempted one more esoteric funding maneuver with a $1 billion secured facility from Apollo Capital Management. This move, intended to allow Apollo to consolidate distressed notes, ultimately prompted creditors to form an ad hoc group and push for a massive restructuring of the group’s staggering $12.5 billion debt, including debt-to-equity conversions.
Beyond the boardrooms and balance sheets, Coulson is known for his loyalty, exemplified by his defense of former Anglo Irish Bank chief executive Seán FitzPatrick. He attributed Ardagh’s initial success to the bank’s support for the Rockware deal. While owning a valuable property in Dublin, Coulson is said to spend much of his time abroad, reportedly now focusing on the leisure sector in sunnier climes, shifting from high finance to a life of personal pursuits.
