Central European Distribution Corporation Working With Roust Trading Ltd. and
Holders of Convertible Notes on Revised Restructuring Proposal, and Amends Key
Dates Relating to Exchange Offers and Back-Up Plan
WARSAW, Poland, March 18, 2013
WARSAW, Poland, March 18, 2013 /PRNewswire/ --Central European Distribution
Corporation (NASDAQ: CEDC) confirmed today that it has received a proposal for
a financial restructuring of its 3% Convertible Notes due March 15, 2013 (the
"2013 Notes"). The proposal was jointly made to CEDC by Roust Trading Ltd. 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"). Roust Trading and the 2013 Steering
Committee collectively hold approximately 73% of the outstanding principal
amount of the 2013 Notes.
CEDC is pleased that Roust Trading and the 2013 Steering Committee have
reached an agreement on a restructuring of the 2013 Notes, the terms of which
were publicly disclosed by Roust Trading on March 14, 2013. While CEDC is
still reviewing the proposal in detail, it is favorably inclined toward the
proposal and anticipates that it will support it, subject to appropriate
documentation that, if approved, will be reflected in a supplement to the
offering memorandum (the "Offering Memorandum") distributed by CEDC in respect
of the exchange offers launched on February 25, 2013, as amended on March 8,
2013 (the "Exchange Offers").
In addition, CEDC has determined to make certain amendments to key dates
relating to the CEDC FinCo Exchange Offer, the Consent Solicitation, and the
solicitation of acceptances to the Plan of Reorganization (each as defined in
the Offering Memorandum) in light of the agreement reached between Roust
Trading and the 2013 Steering Committee, and following further consultation
with a Steering Committee (the "2016 Steering Committee") of holders of
approximately 30% of the outstanding principal amount of CEDC Finance
Corporation International, Inc.'s Senior Secured Notes due 2016 (the "2016
Notes") as follows:
othe record date for the Consent Solicitation and the solicitation of
acceptances of the Plan of Reorganization will be March 21, 2013;
othe Consent Fee Deadline and Early Voting Deadline (each as defined in the
Offering Memorandum) will be 5:00 p.m. on April 3, 2013; and
othe Voting Deadline and Expiration Time (each as defined in the Offering
Memorandum) will be 5:00 p.m. on April 4, 2013.
CEDC is making these amendments to these key dates to allow fulsome
consideration of the Exchange Offers, the Consent Solicitation and the Plan.
In order to receive the Existing 2016 Notes Consideration (as defined in the
Offering Memorandum), holders of 2016 Notes must validly tender and not
withdraw their 2016 Notes, at or prior to the Expiration Time. To receive
payment of cash pursuant to the Cash Option (as defined in the Offering
Memorandum), the holder of record of the applicable 2016 Notes on the
Distribution Date (as defined in the Offering Memorandum) must have been the
holder of record of the applicable 2016 Notes electing the Cash Option as of
March 21, 2013.
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 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
Maturity of 3% Convertible Notes due March 15, 2013
On March 15, 2013, CEDC failed to pay $257,858,000 principal due on the 2013
Notes. Under the terms of the 2013 Notes Indenture, the failure to pay
principal when due constitutes an Event of Default (as defined in the 2013
Notes Indenture). In addition, under Section 6.2 of the Indenture governing
the 2016 Notes ( the "2016 Notes Indenture"), the failure to pay principal
when due on the 2013 Notes constitutes an Event of Default under the 2016
Notes Indenture and, if continuing, holders of not less than 25% of the
aggregate principal amount of the outstanding 2016 Notes may declare the
principal plus any accrued and unpaid interest on the 2016 Notes to be
immediately due and payable. CEDC currently has $380 million and €430 million
(or approximately $559.4 million) of 2016 Notes outstanding.
CEDC intends to address the maturity of the 2013 Notes, as well as the Event
of Default under the 2016 Notes Indenture, through the Exchange Offers.
Alternatively, CEDC may choose to implement the restructuring pursuant to a
pre-packaged chapter 11 plan of reorganization that is included with the
offering materials related to the Exchange Offers. As noted above, Roust
Trading and the 2013 Steering Committee, who collectively hold approximately
73% of the 2013 Notes, support a restructuring of the 2013 Notes in accordance
with the terms of their restructuring proposal. Separately, the 2016 Steering
Committee has stated that it supports the terms of the restructuring of the
2016 Notes as described in the Offering Memorandum.
Any chapter 11 filing would be limited solely to CEDC and CEDC Finance
Corporation International, Inc. None of CEDC's Polish, Russian, Ukrainian or
Hungarian operations would become the subject of any insolvency proceedings.
In this scenario, CEDC anticipates that all its operations would continue
without interruption in the ordinary course, including the payment of all
employee, vendor, and other obligations.
Annual General Meeting of Shareholders
In light of CEDC's current financial condition as well as the on-going nature
of CEDC's restructuring, the board of directors of CEDC has determined to
delay the annual meeting of CEDC's shareholders currently scheduled for March
26, 2013, until Tuesday, May 14, 2013.
CEDC Annual Report
Finally, CEDC announced today that its Annual Report on Form 10-K for the year
ended December 31, 2012 could not be filed with the United States Securities
and Exchange Commission within the prescribed time period as the process of
preparing CEDC's financial statements for the year ended December 31, 2012 has
been delayed due to the focus of CEDC's resources on restructuring its
financial obligations, including preparation and commencement of the Exchange
Offers, negotiating with creditors and addressing open accounting issues
related to CEDCs financial restructuring. CEDC expects to file its Annual
Report on Form 10-K as soon as practicable.
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
Contact: Thomas Mulligan, Sitrick And Company, +1-212-573-6100,
firstname.lastname@example.org, or Anna Zaluska, Corporate PR Manager, Central
European Distribution Corporation, +48 22 456 6061
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