July 9, 2012 / 4:52 PM / 5 years ago

UPDATE 1-CEDC CEO leaves, names largest shareholder chairman

July 9 (Reuters) - Polish vodka maker Central European Distribution Corp, bowing to investor pressure, said its CEO William Carey will step down after more than a decade at the helm and named its largest shareholder Roustam Tariko chairman.

The maker of Absolwent and Parliament vodka appointed David Bailey, current lead director of its board, as interim CEO and amended an agreement with Roust Trading, a Russian alcohol distributor owned by Tariko.

Roust Trading, which in April agreed to buy $210 million of newly issued unsecured CEDC senior notes due in 2016, can now own up to 33 percent of the company’s outstanding shares by buying CEDC stock on the open market.

The company also said the maturity date for the new debt will be extended to July 31, 2016 from March 18, 2013.

The original deal with Roust was struck when vodka producer Russian Standard Corp, which is also owned by Tariko, agreed to a stake of around 28 percent in CEDC, allowing the Polish vodka maker to retire looming debts.

The company’s shares, which traded at about $40 in 2010, plummeted more than 80 percent in 2011 as debt worries and management missteps in Russia dented investor confidence. They were up 33 percent at $3.69 on Monday on the Nasdaq.

CEDC, which said last month that it would restate its financial results from Jan. 1, 2010 as it incorrectly estimated certain rebates, is continuing to review its financial statements.

The company said certain trade rebates provided to customers were not properly recorded by CEDC’s Russian unit, resulting in the company overstating revenue for the period from Jan. 1, 2010 through Dec. 31, 2011.

CEDC, which expects to incur impairment charges of about $10 million related to the restatement, said the adjustments w ill reduce both revenue and EBITDA (earnings before interest, taxes, depreciation, and amortization) by about $49 million.

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