Vodka producer Central European Distribution Corp. is seeking Chapter 11 bankruptcy protection to cut more than $665 million of its debt.
The company is asking a U.S. Bankruptcy Court in Delaware to approve a reorganization plan, which would give ownership of the company to Roust Trading. Roust is owned by CEDC Chairman Roustam Tariko.
CEDC, based in Mt. Laurel, N.J., is one of the largest producers of vodka in the world with brands such as Bols, Parliament, Royal and Soplica. It also is a leading importer of alcoholic drinks in Poland, Russia and Hungary.
The company first announced its plans for reorganization in March and began seeking approval, while fending off a takeover offer from a group of investors that was later withdrawn. The plan does not involve the company's operating subsidiaries in Poland, Russia, Ukraine or Hungary.
CEDC said that the under its plan, bondholders owed $982.2 million in notes due in 2016 would receive $172 million in cash, $450 million in new secured notes and $200 million in new convertible notes. Another group of bondholders, whose debt is due this year, would receive $25 million in cash and $30 million in notes. Those who hold notes due this year and don't participate in the offer would share in $16.9 million in cash. The plan is being funded by Roust in exchange for ownership of the company.
CEDC said that nearly all of its creditors have already voted in favor of the reorganization plan. It filed its bankruptcy paperwork Sunday and plans to hopes to get approval for the plan within 30 to 45 days.