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TheStreet Open House

Central European Distribution Corporation Announces Exchange Offers To Holders Of Certain Notes

Stocks in this article: CEDC

MT. LAUREL, N.J., Feb. 25, 2013 /PRNewswire/ -- Central European Distribution Corporation (NASDAQ: CEDC) announced today that the Company and its subsidiary CEDC Finance Corporation International, Inc. have launched exchange offers to holders of their outstanding Convertible Senior Notes due 2013 and Senior Secured Notes due 2016. The exchange offers are part of a financial restructuring that contemplates a reduction of senior note debt by more than $750 million.

The exchange offers were prompted in part by the impending March 15, 2013 maturity of the Convertible Senior Notes. Moreover, the Company believes that a successful restructuring of both the Convertible Senior Notes and the Senior Secured Notes will improve its financial strength and flexibility and enable it to focus on maximizing the value of its strong brands and market position. The Company is engaged in ongoing and constructive discussions with representatives of its major stakeholders about the terms of the exchange offers.

Separately, the Company has been informed that a committee of holders of the 2016 Senior Secured Notes and Roust Trading Ltd. (RTL), a major CEDC investor, have proposed an alternative to the Company's exchange offers. The alternative proposal has not been formally presented to the CEDC Board of Directors, and the Board therefore has taken no position on it. However, the terms of the alternative proposal are summarized in the same Offering Memorandum that the Company is providing to Note holders to describe the Company's exchange offers.

Under the Company's exchange offers, which expire at 11:59 PM, New York City Time, on March 22, 2013:

  • Holders of the outstanding 3% Convertible Senior Notes Due 2013 issued by CEDC will receive in exchange for each $1,000 principal amount of their notes 8.86 new shares of CEDC common stock.
  • Holders of the outstanding 9.125% Senior Secured Notes due 2016 issued by CEDC Finance Corporation International, Inc. will receive in exchange for each $1,000 principal amount of their notes 16.52 new shares of CEDC common stock and $508.21 principal amount of 6.5% Senior Secured Notes due 2020.
  • Holders of the outstanding 8.875% Senior Secured Notes due 2016 issued by CEDC Finance Corporation International, Inc. will receive in exchange for each €1,000 principal amount of their notes 22.18 new shares of CEDC common stock and $682.37 principal amount of 6.5% Senior Secured Notes due 2020.

Holders of both the Dollar and Euro classes of Senior Secured Notes are being solicited, subject to the same deadline, to approve certain amendments to the indenture governing their Notes, and holders of both the Convertible Senior Notes and the Senior Secured Notes are being solicited, again subject to the same deadline, to approve a back-up Chapter 11 Plan of Reorganization.

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