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:
- the record date for the Consent Solicitation and the
solicitation of acceptances of the Plan of Reorganization will be
March 21, 2013;
- the 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
- the 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 obligations.
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