Investors should consider a rival bid for Central European Distribution Corp. (CEDC) as it provides a better chance at recovery for the Polish vodka producer than the takeover being mooted by Russian billionaire Roustam Tariko, according to a representative for the competing consortium.
Documents will be sent tomorrow seeking creditor support for a competing pre-packaged bankruptcy proposal from a group led by billionaire Mikhail Fridman’s A1, CEDC shareholder and bondholder Mark Kaufman, and Stolichnaya vodka seller SPI Group, representatives said today on a conference call.
CEDC backed a restructuring plan put forward by Tariko’s Roust Trading, which is being voted on by creditors, after the Warsaw-based company was unable to repay $258 million of notes due March 15. CEDC earned two-thirds of 2012 sales in Russia, where it produces Zelyonaya Marka, Parliament and Zhuravli vodka. The counteroffer group’s lawyers and bankers held separate calls with bondholders and media today.
The rival bid is superior because it provides more money, a debtor-in-possession loan to get CEDC through bankruptcy, repays only in-the-money creditors, and avoids some conflicts they perceive with Tariko’s ownership of Russian Standard vodka, said Giovanni Salvetti, who co-heads Rothschild Inc.’s Russia and Ukraine team representing the rival consortium.
“It’s pretty evident to us the proposition that we put on the table -- the latest one -- is definitely superior, objectively superior” to Tariko’s, he said on the call.
A1’s affiliation with Russia’s OAO Alfa Bank means a restructured CEDC will have access to ongoing financial support, Salvetti said. Fridman and his partners in Alfa Group are set to receive $14 billion from the sale of oil producer TNK-BP to OAO Rosneft, Russia’s biggest crude company.
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