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Central European Distribution Corp. Message Board

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  • hageneriksson hageneriksson Dec 14, 2012 6:19 PM Flag

    clash Tariko / CEDC - implications

    From December, 11 filing:

    In December 10, 2012, the Company engaged Alvarez & Marsal North America, LLC, Alvarez & Marsal CIS LLP and Alvarez & Marsal Poland Sp. z o.o. (collectively "Alvarez & Marsal") as its restructuring advisor. Alvarez & Marsal was selected by the Board with the unanimous approval of the special committee of Company directors. The Company also appointed Maxim Frangulov, Managing Director of Alvarez & Marsal and co-head of Alvarez & Marsal's restructuring practice in Russia, as the Company's Chief Restructuring Officer. Mr. Frangulov and his team will serve as independent contractors to the Company and will report to the Board.

    From Novemnber, 21 pr:

    Central European Distribution Corporation (CEDC) today announced that it has engaged Houlihan Lokey Capital, Inc. as financial advisor to CEDC.

    so finally they hired a bank, a restructuring firm and a restructuring officer - there would be absolutely no need to do so (and waste double digit millions in consulting fees) if there's any chance for CEDC and Tariko to come to terms out of court.

    The restructuring firm will file the court documents, the restructuring officer will oversee the proceedings and the investment bank will structure dip- and exit financing as well as advising on the new capital structure following the court restructuring.

    At this point there is a greater than 95% chance that the common stock will end up worthless. If you want to have continuing exposure to the company buy the bonds which are currently traded at 50% of face value and should recover much more of that in bankruptcy.

    At still $100 mln market cap the stock looks pretty vulnerable to further declines before finally declaring chapter 11 in spring.

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    • hagen, it sounds like you are short and want to see the company stock go to zero. I'm not suggesting you are wrong, but the old saying "95% of all statistics are made up on the spot" looks remarkably like your "95% chance the stock will end up worthless." You clearly need to provide more evidence for you analysis. I do not see the company as heading for bankruptcy. In fact, I see it as resolving the issues at hand and recovering.
      But I surely could be the wrong one here.

    • cedcinvestoratgmaildotcom cedcinvestoratgmaildotcom Dec 16, 2012 2:39 AM Flag

      I think your analysis is spot on and I'd like to chat with you about it privately. Send me a message... to my identity.