Ball (BALL) Tenders Offer to Repurchase Outstanding Notes

Ball Corporation, a supplier of sustainable aluminum packaging solutions and aerospace technologies, has announced cash tender offers for certain outstanding debt securities. The company is offering to purchase for cash its outstanding 5.25% senior notes due 2025 and 4.875% senior notes due 2026. The company provided a table summarizing the material pricing terms of the tender offers, outlining the principal amount outstanding, reference securities, fixed spread, early tender premium, and hypothetical total consideration for each set of notes.

The tender offers are set to expire at 5:00 p.m., New York City time, on March 14, 2024, unless extended or earlier terminated. Holders of notes must tender and not withdraw their notes prior to or at 5:00 p.m., New York City time, on February 28, 2024, to be eligible to receive the applicable total consideration. The company also stated that the total consideration, accrued interest, and the costs and expenses of the tender offers are expected to be paid with funds provided by the net cash proceeds from the closing of the previously announced sale of Ball's aerospace business.

In a quote, John A. Hayes, chairman, president and CEO said, "We are pleased to announce these cash tender offers, which are part of our ongoing efforts to optimize our capital structure and reduce interest expense. The offers demonstrate our commitment to proactively manage our balance sheet and lower our cost of debt, while maintaining financial flexibility to fund our growth initiatives and create shareholder value."

On the market, the company's shares have moved 3.6%, and are now trading at a price of $62.0. The full 8-K submission can be accessed here.

2018 2019 2020 2021 2022 2023
Revenue (MM) $11,635 $11,474 $11,781 $13,811 $15,349 $14,174
Revenue Growth n/a -1.38% 2.68% 17.23% 11.14% -7.66%
Operating Margins 8% 8% 9% 9% 8% 8%
Net Margins 4% 5% 5% 6% 5% 4%
Net Income (MM) $453 $536 $582 $878 $732 $613
Net Interest Expense (MM) $301 $317 $275 $270 $312 $446
Depreciation & Amort. (MM) $498 $491 $488 $520 $507 $511
Earnings Per Share $1.29 $1.58 $1.75 $2.65 $2.29 $1.93
EPS Growth n/a 22.48% 10.76% 51.43% -13.58% -15.72%
Diluted Shares (MM) 352 340 333 332 320 317
Free Cash Flow (MM) $750 $950 $319 $34 -$1,350 $433
Capital Expenditures (MM) $816 $598 $1,113 $1,726 $1,651 $1,219
Current Ratio 0.96 0.88 1.05 0.88 0.78 0.81
Total Debt (MM) $6,737 $9,271 $7,697 $7,737 $8,948 $9,591
Net Debt / EBITDA 4.2 5.25 4.25 3.96 4.88 4.94

Ball has positive cash flows, not enough current assets to cover current liabilities because its current ratio is 0.81, and a highly leveraged balance sheet. On the other hand, the company benefits from rapidly growing revenues and increasing reinvestment in the business and positive EPS growth. Furthermore, Ball has decent operating margins with a stable trend.

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