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Roust files for bankruptcy ahead of planned IPO
Żubrówka vodka owner Roust has once again filed for bankruptcy in the US as part of a debt restructuring plan that could precede an anticipated IPO for the company.
Roust, owner of the Żubrówka Bison Grass Vodka brand, plans to launch its IPO in “two to three years”
Roust filed for Chapter 11 bankruptcy with the US Bankruptcy Court for the Southern District of New York – described as the “consummation” of a plan to “strengthen” its balance sheet.
The move comes almost four years after Central European Distribution Corp – the previous incarnation of Roust – filed for bankruptcy in Delaware, ahead of the company’s takeover by Russian Standard Vodka founder Roustam Tariko.
In both Chapter 11 filings, Roust’s subsidiaries in Poland, Russia, Ukraine and Hungary remained unaffected. The company also said its customers, suppliers, employees, trade creditors and third party lending banks would not be impacted by this latest bankruptcy claim.
Chapter 11 of the Bankruptcy Code in the United States allows companies to file a plan of reorganisation to keep their businesses afloat and repay creditors over a period of time.
Roust announced plans for its latest filing in November 2016 as part of a “significant deleveraging transaction”, which will see the firm shed US$462 million in debt and add US$55m in new equity capital.
The transaction will allow Roust to “take advantage of growth opportunities worldwide” and “ensure it is well-positioned for an IPO within the next two to three years”.
In recent years, Roust and the former CEDC have been hit by currency volatility, black market competition and a ban on Russian products entering Ukraine amid ongoing political tensions.
Roust is one of the world’s largest vodka producers, with a leading 30% market share in Russia and export footprint in more than 80 countries.
The company said of this latest restructuring plan: “As the result of successful negotiations, the company’s new capital structure will provide immediately greater value to all stakeholders by positioning [Roust] for accelerated revenue and profit growth within the global alcohol market, thereby strengthening [its] position as the number two vodka company by volume worldwide and the number one alcohol company in Central/Eastern Europe and Russia by volume.”