A1 and Roust Trading Ltd. Commited to Finance CEDC
The A1 Investment Company (“A1”), a member of Alfa Group, and Roust Trading Ltd. (“RTL”), a holding company of Russian Standard Group, today announced that they have entered into an agreement under which, subject to the terms and conditions thereof, an affiliate of A1 commits to make available a loan of up to US$100 million to Russian Alcohol Group and other operating subsidiaries of Central European Distribution Corporation (“CEDC”).
The loan would be for a one-year period, with the possibility of a two-year extension if agreed by the loan parties. In light of the importance of the Russian market to CEDC, the arrangement would ensure a source of additional liquidity during the planned implementation of the financial and operational restructuring of CEDC. RTL has proposed a restructuring plan for CEDC which has the support of CEDC’s board of directors and significant creditor constituencies. The financing commitment from A1, which has unique expertise in restructuring and engineering financial turnarounds, brings added stability to CEDC during the restructuring process. RTL and Closed Joint Stock Company Russian Standard Corporation (“RSC”) have facilitated the A1 financing commitment by agreeing to guarantee the loan which would benefit CEDC and its stakeholders. The CEDC Board of directors has supported the agreement between RTL and A1.
“A1 is confident that our joint efforts in supporting the financial recovery of CEDC will allow the company to overcome its current liquidity issues. Our partnership is a serious step forward for CEDC; all parties involved are satisfied with the proposed restructuring plan, which is custom-fitted to suit the company’s financial needs. This agreement also demonstrates our confidence in the strong growth potential of CEDC and its subsidiaries,” - A1 President Mikhail Khabarov said in a statement.
“The financing commitment from A1 would provide an additional liquidity source for CEDC’s operations on terms that are favorable to CEDC. Such financing is important to the business model and future development of the company,” said Roustam Tariko, President of Russian Standard Corporation.
The cooperation between A1 and RTL will contribute to the swift and stable implementation of the CEDC restructuring plan supported by RTL. A1’s financing commitment and restructuring expertise, together with the investment and industry-specific managerial experience of Russian Standard, is intended to assure improved and sustainable growth for the company in Russia and other core vodka markets.
A1 is one of the leading players on the investment market in Russia and the CIS making equity investments in various industries, pursuing the interests of its shareholders, clients and partners. A1 focuses on investment projects of two types: special situations and growth strategies. Alfa-Bank (Russia), TNK, VimpelCom, Perekrestok and Rosvodokanal Group were originally A1 projects that later became strategic businesses for Alfa Group as well as core companies for the wider Russian economy. A1’s long-term interests are aimed at establishing strong and competitive businesses, producing modern and very high quality goods and services to satisfy Russia’s growing demand, and developing efficient organizational and management systems.