Terms of the Revised Transaction
Effective immediately, RTL has released contractual restrictions on $50 million in cash previously invested in CEDC to allow CEDC to use this cash for working capital and general corporate purposes, and committed to make available a $15 million revolving credit facility to CEDC (drawable no earlier than February 1, 2013), subject to definitive documentation and the provision of reasonably satisfactory security by CEDC. Russian Standard has also committed to provide CEDC with up to $107 million of new capital (reduced by the amount of the commitment under the new revolving credit facility) subject to and conditional upon an overall restructuring of CEDC's capital structure that is acceptable to CEDC and Russian Standard.
In exchange, CEDC will provide guarantees and liens on assets of its subsidiaries in respect of the debt currently evidenced by $50 million of senior CEDC notes held by Russian Standard. In addition, CEDC has agreed to certain corporate governance changes, including:
- The creation of an Operational Management Committee to oversee all day-to-day business and operational management of CEDC with CEDC management to report directly to this committee. The Operational Management Committee will consist of Mr. Roustam Tariko, Mr. Scott Fine and another CEDC board member nominated by Russian Standard.
- The creation of a Restructuring Committee with full responsibility for all matters related to any restructuring of CEDC's capital. The Restructuring Committee will consist of three non-Russian Standard directors and Mr. Roustam Tariko.
- The appointment of Grant Winterton, the current Chief Executive Officer of the Russian Alcohol Group - a CEDC subsidiary, as Chief Executive Officer of CEDC effective January 10, 2013.
CEDC and Russian Standard have also reached agreement on the slate of directors to be proposed at the next annual general meeting of CEDC shareholders, which will be convened as soon as practicable. The slate of directors will consist of three directors nominated by Russian Standard and three directors nominated by non-Russian Standard directors. In addition, shareholders will be given the opportunity to elect a seventh director from among two candidates, one nominated by Russian Standard and one by the non-Russian Standard directors.