US: CEDC heads for bankruptcy as Russian Standard takes over
Central European Distribution Corp is set - finally - to come under the aegis of Russian Standard
Central European Distribution Corporation (CEDC) has proceeded with a bankruptcy filing in the US, as it prepares to be taken over by the owner of Russian Standard.
The company, which has been struggling with debt in recent months, said yesterday (7 April) that it has commenced voluntary proceedings in the the US Bankruptcy Court for the District of Delaware for its US operations. The move will trigger a “Pre-packaged Chapter 11 Plan of Reorganisation” that the firm started preparing for in February.
The financial restructure will clear around $665m of debt from CEDC's US units, CEDC Finance Corporation International, Inc. and CEDC Finance Corporation, with the group's subsidiaries in Poland, Russia, Ukraine and Hungary remaining unaffected.
Subsequently, Roust Trading, which is owned by CEDC's chairman and owner of the Russian Standard vodka brand, Roustam Tariko, will take full control of the reorganised CEDC.
Roust Trading, which holds around $102.6m of CEDC's 3% Convertible Senior Notes that were due on 15 March, will offer the other note-holders a total consideration of $55m, composed of $25m in cash and $30m in Roust Trading notes, which together represents a recovery of around 34.9%.
Also, holders of CEDC's 2016 notes will receive $172m in cash, $450m in new secured notes and $200m in new convertible notes, providing a recovery of around 83.7%.
The firm's bankruptcy filing will be heard tomorrow, with CEDC set to ask the Delaware court to schedule its confirmation of the reorganisation plan within 30 to 45 days.
Separately, CEDC approved the terms of a new US$100m unsecured credit facility for the benefit of its Russian operations. The facility, which has a one-year term, was arranged by Roust Trading.
Russian investor Roustam Tariko, the owner of Russian Standard, gained full control of CEDC in April 2013. The new owner is expected to focus more on the Russian market. This, in turn, could mean less...
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