Tariko To Take Control Of CEDC, In Exchange For $65 Million In FundingJanuary 2, 2013
Roustam Tariko, who has been engaged in a war of words with Central European Distribution Corp.’s board of directors over the past few months, is assuming operational control of the company in exchange for up to $65 million in funding. Under terms of the pact between Tariko and CEDC’s board, Tariko will lead a newly formed management committee that will oversee CEDC’s day-to-day operations. Additionally, CEDC has appointed Grant Winterton as CEO, effective January 10. Winterton is currently general manager of CEDC subsidiary Russian Alcohol Group.
The $65 million consists of Tariko releasing restrictions on $50 million in cash previously invested in CEDC and providing a new $15 million revolving credit facility to the company. Tariko, owner of Russian Standard and CEDC’s biggest shareholder, agreed last July to raise his stake in CEDC to as much as 42.9%. At that time, he said he intended to eventually gain control of the company, which owns such vodka brands as Absolwent and Parliament.
However, in November, following CEDC’s restatement of financial results from the previous two years, Tariko said that he was “no longer obligated to complete the pending strategic alliance” between Russian Standard and CEDC. In the succeeding weeks, Tariko and CEDC traded a series of contentious letters and publicly debated about the composition of the company’s board. With this new accord, the dispute appears to be settled, at least for the time being.