March 19 Central European Distribution Corp
, the maker of Russian Standard Vodka, said it has
scrapped a bond exchange after a rival company owned by its
chairman made its own offer for the same notes.
Roust Trading Ltd, owned by Russian billionaire and CEDC
Chairman Roustam Tariko, has offered to buy the CEDC notes that
it does not own for $25 million in cash and $30 million in
secured notes issued by Roust.
Tariko's company owns approximately $102.6 million of the
$258 million of the 2013 notes, which matured on March 15
without a payment from CEDC.
CEDC, which also makes Absolwent and Parliament vodka, has
struggled with financial problems, the resignation of its chief
executive and recent battles with shareholders over control of
The company, which has headquarters in Warsaw, Poland and
Mount Laurel, New Jersey, holds large shares of the vodka market
in Russia, Hungary and Poland.
Shares of CEDC have plunged in the past year and on Tuesday
were down 6.3 cents, or nearly 20 percent at 28.9 cents on
CEDC said in a statement late Monday that its offer to
exchange its $559 million of notes that mature in 2016 remains
CEDC is also soliciting votes on a plan of reorganization in
conjunction with its bond exchange offer. If the company fails
to get the required votes to complete its bond exchange, it
plans to file for protection from creditors in Delaware's
The company said on Monday it extended the deadline for the
bond exchange to April 4 from March 22.
In addition to the offer by Roust, a consortium of investors
are holding their own negotiations to rescue CEDC. That group
includes a unit of Russian conglomerate A1, SPI Group, which
owns Stolichnaya Vodka, and Mark Kaufman of Monaco, who is a
large shareholder of CEDC.