MT. LAUREL, N.J. (AP) — Vodka was the stock market's drink of choice Monday.
Shares of Central European Distribution Corp., a vodka producer based in Mt. Laurel, N.J., soared more than 33 percent after it announced that Russian financiers expect to buy a bigger stake of the company.
On Monday afternoon, the shares were trading at $3.67, up 92 cents.
CEDC also announced, without explaining, that its long-time CEO was stepping down. It was a difficult spring for CEDC.
In early May the company sold about 5.7 million shares for $30 million, or $5.25 each, to a private Russian vodka maker called Russian Standard Corp. The investors were paying a premium, as shares closed that day at $4.46.
Then, in early June, CEDC announced that it had overestimated its results in Russia for 2010 and 2011 and its shares fell in succeeding weeks. They closed Friday at $2.76 but bounced Monday after Russian Standard signaled that it's still interested in CEDC.
CEDC said in a statement that Russian Standard had signed an agreement to invest up to $210 million in the company so it won't have to worry about loans that were supposed to come due next year. CEDC, in return, will issue Russian Standard another 10 million shares "as a purchase price adjustment." It also said it will give the investors the right to buy up to 42.9 percent of the company if Polish regulators approve.
The company said Bill Carey, CEO since its founding in 1997, had resigned.
David Bailey, the lead director on the company's board, was appointed interim CEO. Bailey, 68, has been on CEDC's board since 2003 and was International Paper's director of Eastern Europe before he retired.
"On behalf of the entire Board, I would like to thank Bill Carey for his dedication to CEDC and to wish him all the best in his future endeavors," Bailey said in a statement. "Thanks to Bill's leadership as CEO from the Company's founding, we will be building on a base as one of the world's largest vodka producers, with a strong portfolio of brands."
Russian Standard has stakes in other alcohol companies, including a majority interest in Italian wine-maker Gancia SPA.
CEDC sells vodka in the U.S., England, France and Japan, among other countries. It said that, at the end of last year, it was the largest vodka producer in Russia, the world's largest vodka market.