CEDC files for bankruptcy ahead of Russian Standard takeover

Central European Distribution Corp (CEDC) has filed for bankruptcy in the US ahead of a takeover by Roustam Tariko, the owner of Russian Standard.

In a statement released yesterday (7 April), the vodka producer announced it has now commenced voluntary proceedings with a filing in the US Bankruptcy Court for the District of Delaware.

The filing will make way for a planned pre-packaged restructure, which will clear around US$665m of US debt, and eventually result in Roust Trading, owned by Tariko who is also CEDC chairman, taking full control of the company.

CEDC’s subsidiaries in Poland, Russia, Ukraine and Hungary remain unaffected by the bankruptcy and subsequent reorganisation.

Holders of existing 2016 notes will receive a cumulative total of $822m – a recovery of 83.7%. Holders of 2013 notes, other than Roust Trading, will receive a total of $55m, a recovery of 34.9% of their worth.

The filing comes just days after a takeover proposal by a consortium of investors led by Alfa Bank’s A1, SPI Group and CEDC shareholder Mark Kaufman, was rescinded.

Separately, the group will also receive a $100m credit facility for its Russian subsidiary JSC Russian Alcohol Group (RAG).