Polish vodka maker Central European Distribution Corp (CEDC.O) on Wednesday urged its top shareholder, Russian billionaire Roustam Tariko, to make an offer for the company or help deal with its financing issues.
“If Russian Standard wants total control of CEDC to the exclusion of other stakeholders, Russian Standard should make an offer to buy the company or step up with a definitive and binding offer to help the company through its financing issues,” CEDC said in a letter to its second-largest shareholder Mark Kaufman.
Tariko, through his firms Russian Standard and Roust Trading, struck a deal to take a stake of around 28 percent in CEDC earlier this year, allowing the company to retire looming debts.
However, Tariko in a November 13 letter to the board said Roust Trading is no longer obligated to complete the pending strategic alliance deal as recent restatements by the company had led to a breach of its agreements. Tariko is the chairman and interim President of CEDC.
CEDC, the maker of Absolwent and Parliament vodka, has been struggling with debt and also failed to properly record certain trade rebates provided to customers, resulting in restatements.
The company also denied Kaufman’s request for a seat on the board in its letter.
“You (Kaufman) were an accomplished executive and owner of the Whitehall spirits business inRussia that was sold to CEDC – that does not necessarily make you an ideal candidate to be an independent director of CEDC at this time,” CEDC said, citing a decision by its special committee.
In his letters on November 14 and November 19, Kaufman had called for a shakeup of CEDC’s board and also backed Tariko’s concerns on the company’s operation.
CEDC shares closed at $1.84 on the Nasdaq. The shares have lost nearly 60 percent of their value this year after falling 80 percent in 2011.