WARSAW, Poland, March 8, 2013 /PRNewswire/ -- Central European
Distribution Corporation (NASDAQ: CEDC) announced today that the
Company and its subsidiary, CEDC Finance Corporation International,
Inc. ("CEDC FinCo"), have amended their exchange offers, commenced
on February 25, 2013, to reflect
terms agreed to and supported by the Company, Roust Trading Ltd.
("RTL"), a major investor in the Company, and a Steering Committee
of holders of approximately 30% of the outstanding principal amount
of CEDC FinCo's Senior Secured Notes due 2016 (the "2016 Steering
Committee").
Under the terms of the amended exchange offers, which expire at
11:59 PM, New York City Time, on
March 22, 2013:
- RTL will acquire 85% of the equity of CEDC in exchange for (i)
$172 million in cash, the proceeds of
which will be paid by CEDC to holders of the Senior Secured Notes
due 2016, and (ii) the compromise of a $50
million secured credit facility previously provided by RTL
to CEDC;
- Holders of the Senior Secured Notes due 2016 who tender their
Notes will receive (i) the option to receive a total of
$172 million in cash, from the
proceeds of the RTL investment, pursuant to a "Dutch Auction"
procedure (the "Cash Option") and (ii) to the extent not accepted
in the Cash Option or at the option of individual holders, their
pro rata share of (a) new secured notes due 2018 in the aggregate
principal amount of $450 million (the
"New Secured Notes") and (b) new convertible secured notes due 2018
in the aggregate principal amount of $200
million (the "New Convertible Notes");
- Holders of CEDC's 3.00% Convertible Senior Notes due
March 15, 2013 who tender their
Notes, and RTL, as holder of $20
million principal amount of unsecured notes (the "Unsecured
Notes"), together will receive their pro rata share of 10% of the
equity in CEDC; and
- CEDC's existing stockholders will have their stock holdings
diluted to 5% of the equity in CEDC.
The exchange offers contemplate a financial restructuring that
will reduce CEDC's and CEDC FinCo's debt by up to approximately
$635 million. The Company
believes 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. The Company believes that its
subsidiaries acting in Poland,
Russia, Hungary and Ukraine have sufficient cash and resources on
hand to meet all such obligations.
The terms of the amended exchange offers incorporate the terms
of an agreement previously reached between RTL and the 2016
Steering Committee and disclosed in the Company's original offering
documents launched on February 25,
2013. After extensive discussion with representatives of RTL
and the 2016 Steering Committee and deliberation regarding CEDC's
alternatives, CEDC determined to proceed with an amended offer
reflecting this agreement. Other significant, potential
transaction parties have publicly expressed interest in a possible
transaction with CEDC. CEDC will continue discussions with
such parties and consideration of possible alternatives in
furtherance of the interests of all CEDC stakeholders.
The terms of the Cash Option are further described in an amended
and restated offering memorandum dated March
8, 2013. As further described in the amended and
restated offering memorandum, the $450
million of New Secured Notes will bear interest of 8% per
annum, increasing to 9% in year two and 10% in year three and
thereafter. The $200 million in
New Convertible Notes will bear interest of 10% per annum (payable
in cash or in kind), convertible after 18 months into 20% of CEDC's
equity, increasing to 25% if converted in 2015, 30% if converted in
2016 and then 35% if converted in 2016 or thereafter.
The Company 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
offer. Any such filing would be limited solely to CEDC and
CEDC FinCo. None of the Company's Polish, Russian, Ukrainian
or Hungarian operations would become the subject of any insolvency
proceedings. In this scenario, the Company anticipates that
all its operations would continue without interruption in the
ordinary course, including the payment of all employee, vendor, and
other obligations. The treatment of the creditors and
stockholders would be the same under the chapter 11 plan as in the
amended exchange offers, assuming that the class of Unsecured Notes
votes to accept the plan. If such votes are not obtained,
holders of the Unsecured Notes and existing equity would receive no
recovery.
CEDC has filed today a revised Tender Offer Statement on
Schedule TO, together with the Offering Memorandum and related
Letters of Transmittal that are exhibits to the Tender Offer
Statement on Schedule TO, with the Securities and Exchange
Commission ("SEC"). Each such document, as well as any amendments,
supplements or additional exhibits thereto, are available, free of
charge, from the SEC's website at www.sec.gov. Note holders are
encouraged to read these documents, as they contain important
information regarding the terms and conditions of the amended
exchange offers and a pre-packaged chapter 11 plan of
reorganization as well as certain consequences of their
implementation for CEDC, the Note holders and the existing
shareholders of CEDC.
Requests for the Offering Memorandum and other documents
relating to the amended exchange offers may be directed to Garden
City Group, the information and exchange agent for the amended
exchange offers, at (800) 878-1684 (toll-free North America) or (614) 763-6110 (direct-dial
toll international).
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 amended
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.
The amended exchange offers are being made pursuant to an
exemption from registration under Section 3(a)(9) of the Securities
Act of 1933. The exchange offers are only being made pursuant to
the Offering Memorandum and the related Letters of Transmittal. The
amended exchange offers are not being made to note holders in any
jurisdiction in which the making or acceptance thereof would not be
in compliance with the securities, blue sky or other laws of such
jurisdiction.
SOURCE Central European Distribution Corporation