Tariko Getting Control Over CEDC

MTMoscow bartenders will still be mixing drinks with Parliament vodka if thanks to an organized bankruptcy deal.

Poland's Central European Distribution Corp, seeking to reduce its debt load, has filed for pre-packaged bankruptcy that will give Russian businessman Roustam Tariko full control of the vodka producer, a court filing showed.

CEDC, which makes Absolwent and Parliament vodka and is a market leader in Russia, Hungary and Poland, has struggled with financial problems and the resignation of its chief executive.

A spat with Tariko ended last December when it ceded operational control to him in exchange for up to $65 million in funding.

The Chapter 11 restructuring plan, which was approved by the company's creditors, will slash about $665.2 million in debt from the company's balance sheet.

The filing showed that CEDC had liabilities of $1.74 billion and assets of $1.98 billion.

If Delaware's bankruptcy court approves the plan, Tariko's Roust Trading will end up owning 100 percent of the company's outstanding stock.

Holders of the existing 2016 notes which have claims totaling $982.2 million, will receive $822 million, consisting of $172 million in cash, $450 million in new secured notes and $200 million in new convertible notes.

Holders of 2013 notes who participate in the plan, will receive about $55 million, comprised of $25 million in cash and $30 million in secured notes issued by Roust Trading, resulting in an estimated recovery of 35.4 percent.

In a prepackaged bankruptcy, management negotiates the general terms of a bankruptcy plan with major creditors prior to the filing.

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