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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