CEDC to Receive $65M in Funding, Russian Standard to Assume Oversight Responsibility
Central European Distribution Corporation (NASDAQ: CEDC) announced today that it has agreed to a revised transaction with Russian Standard (through its affiliate, Roust Trading Ltd. ("RTL")). This agreement represents a renewed commitment by Russian Standard to a strategic alliance with CEDC and is an important vote of confidence in the future success of CEDC's business. The agreement also addresses the ongoing management of CEDC, with directors nominated by Russian Standard taking responsibility for CEDC's operations through a newly-formed committee of the CEDC Board of Directors. A special committee led by CEDC directors unaffiliated with Russian Standard will retain control of any restructuring of CEDC's capital structure. This amended transaction is intended to stabilize CEDC's business and to pave the way for CEDC to address its balance sheet issues in an orderly fashion.
Under the revised terms, Russian Standard has:
o released restrictions on $50 million in cash previously invested in CEDC, making such funds available for working capital and general corporate purposes, o agreed to provide a new $15 million revolving credit facility to CEDC, and o agreed to provide up to $107 million in new capital to CEDC (reduced by the commitment under the new revolving credit facility) subject to and conditional upon an overall restructuring of CEDC's capital structure that is acceptable to CEDC and Russian Standard.
In turn, CEDC has:
o created an Operational Management Committee of the CEDC Board of Directors to be led by Mr. Tariko, o created a Restructuring Committee of the CEDC Board of Directors to be led by non-Russian Standard directors, o appointed Grant Winterton as Chief Executive Officer of CEDC, effective January 10, 2013. Mr. Winterton is the current General Manager of the Russian Alcohol Group - a CEDC subsidiary. Mr. Winterton has over 20 years of experience working in marketing, sales and general management positions for Campbells Soup (Australia), The Coca-Cola Company (Australia, Russia, Ukraine, China), Wimm Bill Dann (Russia) and Red Bull (Russia). Mr. Winterton has lived in Russia for over 10 years, working in the consumer goods industry, and has extensive working experience across the Russia, Ukraine, Belarus and CIS markets. He joined CEDC as General Manager of the Russian Alcohol Group in April 2012. o agreed to call an annual shareholders' meeting as soon as practicable to vote on a slate of directors agreed between CEDC and Russian Standard and to decide if Russian Standard nominees will comprise a majority of the CEDC Board of Directors.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.