Russian Standard Invests $100m in CEDC

Russian Standard Corporation, a business with interests in premium vodka, spirits distribution and banking and insurance is entering into a strategic alliance with Central European Distribution Corporation (CEDC). Russian Standard will make an initial investment of US$100 million in CEDC. Ropes & Gray advised Russian Standard on the transaction.


Ropes & Gray is representing Russian Standard Corporation (with its affiliated companies, “Russian Standard”), a leading private company in Russia with business interests in premium vodka, spirits distribution, banking and insurance, in entering into a strategic alliance with Central European Distribution Corporation (Nasdaq: CEDC). The parties have signed definitive agreements that provide for an initial investment by Russian Standard of US$100,000,000 in CEDC through the purchase of a combination of newly issued shares of CEDC common stock and exchangeable notes (exchangeable into common shares of CEDC following shareholder approval) to be issued by CEDC. In addition, Russian Standard has agreed to purchase up to US$210,000,000 principal amount of newly issued, unsecured CEDC senior notes due July 31, 2016 at a blended interest rate of 6.00%. The proceeds of these investments will be used to retire CEDC’s 3.00% Senior Convertible Notes due 2013.
The Ropes & Gray team was led by Boston-based partner Chris Comeau, handling the equity investment and U.S. securities law issues, and London-based partner Jane Rogers, handling the debt investment. Washington, D.C.-based partner Jim Myers was also involved across all areas of the transaction, and Boston-based partner David Saltzman led the tax aspects of the deal. The team included associates Jason Freedman (San Francisco); Michael Kazakevich (London); Collin McDonald (London); Larissa Smith (New York); Diana Nenchev (Boston); Brandon McGathy (San Francisco); and Kase Jubboori (Boston).
Jim Myers commented on the transaction, “Ropes & Gray is delighted to have helped our long-term client, Mr. Roustam Tariko and his Russian Standard companies, structure and document a very complex legal transaction involving multiple countries, businesses, transactions, and regulatory regimes. These cooperative agreements implement our client’s forward looking vision for his businesses. This project is exactly the kind of strategic and cutting edge legal work that our firm is renowned for. We are grateful that our client has entrusted this very important project to us.”
Jane Rogers added, “This transaction presented an opportunity for Ropes & Gray to take advantage of our depth and breadth in structuring and negotiating complex equity and debt investments across our geographies and demonstrates our team approach and the tight integration of our practice across offices. Our clients rely on our ability to work seamlessly across the globe and deliver on what they need. ”
The closing of the transactions contemplated by the definitive agreements will take place in three stages and is subject to customary conditions.
Ropes & Gray, a global law firm with more than 1,100 lawyers and professionals, provides clients with execution of their transactions from offices in the world’s major centers of business, finance, technology and government – London, Hong Kong, Shanghai, Tokyo, New York, Washington, D.C., Boston, Chicago, San Francisco and Silicon Valley. The firm is highly and consistently ranked for its practices in private equity, M&A, finance, investment management, hedge funds, life sciences, health care, intellectual property, litigation, securities litigation and government enforcement.