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Żubrówka maker’s bankruptcy plans approved

A New York judge has approved Roust’s application for bankruptcy in the US as the vodka maker embarks on a major debt restructuring plan.

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Żubrówka maker Roust has received approval to proceed with its latest bankruptcy filing

Roust, maker of the Żubrówka and Russian Standard vodka brands, recently filed for Chapter 11 bankruptcy with the US Bankruptcy Court for the Southern District of New York.

In a statement, the group described the move as the “consummation” of a strategy to “strengthen” its balance sheet and said it precedes plans to launch an IPO.

Roust’s previous incarnation, Central European Distribution Corp, filed for bankruptcy in Delaware in 2013, ahead of its takeover by Russian Standard Vodka founder Roustam Tariko.

Law360 now reports that despite a single objection from a US trustee, who said the proposal was being pushed through at “unprecedented speed”, US bankruptcy Judge Robert D. Drain approved Roust’s application.

Drain said that while Roust filed for Chapter 11 on 30 December, the firm had informed creditors on 1 December. The proposal was approved by all voting creditors.

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.

The move will allow Roust to shed US$462 million in debt and add US$55m in new equity capital, as well as “take advantage of growth opportunities worldwide”.

In recent years, Roust has been hit by currency volatility, black market competition and a ban on Russian products entering Ukraine amid on-going political tensions.

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