The consortium, which also includes A1 – a division of Russia’s Alfa bank – and CEDC shareholder Mark Kaufman, made an offer for the Poland-based drinks group for US$280 million cash and $650m in new debt to restructure the group.
In exchange the consortium would receive 100% of reorganised equity in CEDC.
The bid comes after CEDC, which owns the Zubrowka, Green Mark, Absolwent and Parliament brands, defaulted on the exchange of $257bn worth of notes that were due to mature on 15 March.
“SPI has a fantastic ability to help those brands develop an export business,” said Val Mendeleev, CEO of SPI Group. “Our products are currently distributed in 167 markets worldwide and we can certainly add CEDC brands with high potential – particularly in the USA where we’ll have our own distribution company from 1 January”
CEDC currently holds just under 6% of the entire vodka category, but crippled by debt, its shares have floundered and hit 44 cents in March in New York, down 80% on the start of the year.
A letter to the CEDC board, written on behalf of the consortium: “The Consortium is confident that this new proposal constitutes the most attractive offer available for the Company and 2016 note holders and substantially improves our previous term sheet.
“This is true not only in immediate and evident monetary terms but also from the point of view of CEDC’s financial position and liquidity as well as future development.”
Roust Trading owner Roustam Tariko, already a major shareholder in CEDC and holder of around $102.6m of the 2013 notes, has also made a bid for the company. He offered to buy the notes he doesn’t own – approximately $155.3m – for $25m in cash and $30m in secured notes issued by Roust.
“CEDC continues to believe that a successful restructuring will improve its financial strength and flexibility, and enable it to focus on maximizing the value of its strong brands and market position,” the group stated. “The restructuring is expected to have no effect on CEDC’s operations in Poland, Russia, Hungary or Ukraine, all of which will continue doing business as usual.”
Source: The Spirits Business