WARSAW, Poland, March 18, 2013 /PRNewswire/ -- Central
European Distribution Corporation (NASDAQ: CEDC) announced today
that CEDC has terminated its offer to exchange new common stock in
CEDC for its outstanding 3.00% Senior Notes due 2013 (the "2013
Notes"), launched on February 25,
2013 and amended on March 8,
2013 (the "2013 Notes Exchange Offer"). CEDC will
continue to solicit votes from the holders of the 2013 Notes on an
amended pre-packaged chapter 11 plan of reorganization (the
"Amended Plan") that is included in a supplement (the "Supplement")
to the offering memorandum distributed by CEDC in respect of the
exchange offers launched on February 25,
2013, as amended on March 8,
2013 (the "Offering Memorandum").
The 2013 Notes Exchange Offer has been terminated in light of
the agreement reached between Roust Trading Ltd. ("Roust Trading"),
who holds approximately $102.6
million principal amount of the 2013 Notes, and other
beneficial owners holding an aggregate of approximately
$85.7 million in outstanding
principal amount of the 2013 Notes (the "2013 Steering
Committee"). After extensive discussion with
representatives of Roust Trading and the 2013 Steering Committee
and deliberation regarding CEDC's alternatives, the CEDC Board of
Directors resolved unanimously today to terminate the 2013 Notes
Exchange Offer and proceed with a vote on the Amended Plan in
support of the 2013 Notes Proposal as described below.
Under the terms of the Roust Trading agreement with the 2013
Steering Committee, as described in Roust Trading's Form 13D/A
filed with the United States Securities and Exchange Commission on
March 14, 2013 (the "RTL 2013 Notes
Proposal"), Roust Trading will make an offer to exchange, subject
to certain conditions, 2013 Notes not held by Roust Trading –
approximately $155.3 million
principal amount of the 2013 Notes – for a pro rata share of an
aggregate of $25 million in cash and
an aggregate principal amount of $30
million secured notes to be issued by Roust Trading (the
"RTL Exchange Offer"). Based on this proposal, holders of 2013
Notes participating in the RTL Exchange Offer would receive an
estimated recovery of 35.4% of principal amount on the 2013
Notes.
Alternatively, under the Amended Plan, holders of 2013 Notes and
Roust Trading's $20 million aggregate
principal amount of unsecured notes (together with the 2013 Notes,
"Unsecured Notes") will receive a pro rata share of $16.9 million in cash. Roust Trading and
the 2013 Steering Committee have announced that they collectively
hold approximately 73% of the outstanding principal amount of the
2013 Notes. Based on this proposal, if the Amended Plan is approved
by the requisite amount of holders of Unsecured Notes, holders of
2013 Notes that do not participate in the RTL Exchange Offer would
receive an estimated recovery of 6% of principal amount on the 2013
Notes.
The Supplement and Amended Plan also reflect the proposed
restructuring of the 2016 Notes. The economic terms remain
unchanged from those described in the Offering Memorandum. As
announced earlier today, however, a new record date, consent
deadline, and voting deadline have been set with respect to both
the 2013 Notes and the 2016 Notes.
CEDC's advisors will host a telephonic conference call on
March 21, 2013 at 10:00 a.m. EDT to further explain the
solicitation and related mechanics and to respond to questions by
holders of the 2013 Notes and the 2016 Notes. The U.S.
telephone number for the conference call is +1-888-312-3051.
The international telephone number for the conference call is
+1-719-785-9449. The conference code is 4328703. The
subject of the conference call will be strictly limited to an
explanation of the tender, consent and voting requirements.
No financial or other information will be shared on the call, and
neither CEDC nor its representatives will take any position on the
call whether holders of 2016 Notes should tender their notes
pursuant to the exchange.
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. Any chapter 11 filing to implement the Amended Plan
would be limited solely to CEDC and its US subsidiaries. None
of CEDC's Polish, Russian, Ukrainian or Hungarian operations would
become the subject of any insolvency proceedings. 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. Obligations to all employees, vendors, and
providers of credit support lines in Poland, Russia, Hungary and Ukraine will be honored in the ordinary course
of business without interruption. CEDC believes that its
subsidiaries in Poland,
Russia, Hungary and Ukraine have sufficient cash and resources on
hand to meet all such obligations.
None of CEDC, CEDC Finance Corporation International, Inc., or
the information and exchange agent makes any recommendation as to
whether holders should tender their notes pursuant to the Exchange
Offers. Each holder must make its own decision as to whether to
tender its notes and, if so, the principal amount of the notes to
be tendered.
This press release is for informational purposes only and is
neither an offer to buy nor a solicitation of an offer to sell the
notes or any other securities of CEDC.
SOURCE Central European Distribution Corporation