just The Facts – Russian Standard and Central Eastern Distribution
Earlier today (23 April), Russian Standard finally got the okay to up its stake in Central European Distribution Corporation. The move, which could cost Russian Standard up to US$310m, could see the firm hold up to 28% of CEDC. Here, just-drinks breaks down the full terms of the tie-up.
Russian Standard will make its investment in three stages:
- First, it will acquire 5.7m shares in CEDC for $30m ($5.25 per share), and $70m of senior notes, due in March 2013, which will have an interest rate of 3%, to be issued by CEDC. Either side could permit Russian Standard to buy further shares – around 13.3m - at $5.25 each to cover the $70m in notes plus any interest.
- It will also buy $102.6m of senior rollover notes due in July 2016, from CEDC in exchange for $102.6m of CEDC's 3% Convertible Notes due 2013 then held by Russian Standard.
- Finally, CEDC may issue senior backstop notes to Russian Standard of up to $107.5m, also due in July 2016. These notes would be used to pay the remaining principal amount of 3% Convertible Notes due 2013 then outstanding.
Each of the rollover and backstop notes will bear a blended interest rate of 6% over the term of each note.
All of these are subject to shareholder approval.
Central European Distribution Corp has hailed a welcome distraction from its recent troubles, with its Zubrowka vodka brand names as the fastest-growing spirits brand last year....
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