Dec 28 Top shareholder Roustam Tariko will get
operational control of Polish vodka maker Central European
Distribution Corp in exchange for up to $65 million in
funding, CEDC said on Friday.
Directors nominated by Tariko's Russian Standard will take
responsibility for CEDC's operations through a newly-formed
The panel, led by Tariko himself, will oversee all
day-to-day business and operations and the company's management
will report directly to it.
CEDC -- the maker of Absolwent and Parliament vodka -- also
named Grant Winterton, currently the general manager of one of
its units, as its chief executive.
Russian billionaire Tariko acquired about 28 percent of CEDC
earlier this year through his companies Russian Standard and
Roust Trading in a deal that was expected to help the Polish
company retire looming debts.
However, Tariko in a Nov. 13 letter, said Roust Trading is
no longer obligated to complete the pending deal as recent
restatements by CEDC had led to a breach of the agreement.
CEDC earlier this month rejected a proposal that would have
thrown it a lifeline in exchange for several conditions,
including handing over operational and financial oversight to
directors designated by Roust Trading.
Under the new deal, a special committee led by CEDC
directors unaffiliated with Russian Standard will retain control
of any restructuring of CEDC's capital structure.
CEDC also agreed to call an annual shareholders' meeting to
elect new directors, another of Tariko's long standing demands.
In return, Tariko has released contractual restrictions on
$50 million in cash previously invested in CEDC, and committed
to make available a $15 million revolving credit facility.
The agreement follows a flurry of letters from Tariko and
CEDC's second largest shareholder Mark Kaufman, expressing
disappointment with the way the company was operating and
calling for a shake-up of the board.
CEDC shares were down 9 percent at $2.00 on Friday on the
Nasdaq. They have lost half of their value so far this year
after falling 80 percent in 2011.