Roustam Tariko's company admitted default

Roust Trading Limited company, which combines alcohol assets of Roustam Tariko and Russian Standard bank, defaulted on the bonds worth $37 million.
Origin source
In late May, the company Roust Trading Limited was unable to repay the three-year bonds issued in March 2013 and assigned to the maturity of May 31, 2016. The company did not pay $ 37 million to holders of bonds.

Four days before the default, 27 May, the company offered to investors to approve the restructuring plan, it follows from the information published in a Bloomberg terminal. "It is an ordinary market transaction on the extension of the maturity of a small tranche of bonds to the payment of the commission", - said the official representative of holding "Russian Standard". A source familiar with the negotiations told RBC that the restructuring involves the prolongation of the securities until the end of November, after which they will be repaid.

"Noteholders who voted in favor of the extension, the commission shall be paid at a rate of 5% (per $ 1,000 face value bond is paid $ 50)", - said the representative of the holding company. According to him, for the extension of the maturity of the bonds already voted more than 90% of the holders, and the transaction is in the closing stages.

In statements for the first quarter of 2016 Roust warned investors thatcan ask for debt restructuring. "If we will not be able to service its debt or face a significant reduction in liquidity, we will be forced to reduce or delay planned capital expenditures, sell assets, restructure or refinance its debt or seek additional equity," - the document says.

Notes in question, Tariq got a legacy from the Polish alcohol holding Central European Distribution Corporation (CEDC), which absorbed the Russian billionaire in 2013, becoming the second largest vodka producer in the world after the British Diageo. CEDC was then in preddefoltnom condition and could not pay the holders of $ 1.3 billion in bonds, which won for the expansion of the Russian market. Tariq acquiring holding company, has paid a part of the holders of securities, paying $ 172 million in cash and the remaining amount of debt issued new securities - credit notes maturing in 2016 and 2018. Now Roust Corporation debt on credit notes is almost $ 750 million, of which $ 718 million will have to repay in 2018.

On Wednesday, June 29, seniorcredit notes Roust Corporation at $ 465 million were traded on the Berlin Stock Exchange for 70.5% of the nominal value, the lower the credit notes for $ 200 million - 24.9% of the nominal value.

In mid-January Roust Corporation sent a letter to investors, which has asked bondholders for $ 750 million to disclose their positions (have RBC). Agent Company acted Orient Capital, which in October 2015 was engaged in the restructuring of bond bank "Russian Standard". Then the restructuring of subordinated Eurobonds for $ 550 million plan called for early payment to the holders of 18% of the nominal value of securities in cash and issuance of the remaining amount of the debt by special appointment of new Eurobond maturity of 7 years, secured 49% of the shares of Russian Standard Bank.

Lack of cache

The presentation for investors prepared alcoholic holding Tariq in the first quarter 2016, the company points to the "force majeure", which led to the fact that cash flow from operations was below the optimum level: the purchasing power of Russians fell, increased cost of financingIAOD from Russian banks, the main competitor - Status Group - increased sales of vodka at a minimum price of 185 rubles, and in addition, Russian vodka was banned in Ukraine..

In the first quarter Roust Corporation received a loss of $ 16.7 million (against a loss of $ 18.6 million for the same period 2015). Group revenue decreased by 7% compared to the first quarter of 2014 and by 20% in relation to the pre-crisis 2013, to $ 265 million. The company's total debt at March 31 was $ 937.7 million, which is almost 11 times more than the EBITDA of the holding in 2015.

The ability to service debt, refinance it, and invest in the development depends on the ability Roust generate cash flow, which "have a significant pressure," "negative situation" in Russia and Ukraine and the devaluation of the ruble, according to the statements. In the first quarter of 2016 the company managed to generate operating cash flow of $ 18.1 million, but the amount of cash at the end of the period amounted to only $ 8.9 million. (Versus $ 35 million in early 2015). Some of the money was spent on investments and debt repayment.

Vodka in the bank

Part Tariq alcoholic assets last year became the property he owns the bank "Russian Standard". In June 2015 the Bank from its own funds bought shares of the company of alcohol by 3.8 billion rubles., And the proceeds from the sale of shares a shareholder has made money in the bank as grants, thus increasing the capital base.

A similar operation shareholder re-made in September, when the "Russian Standard" has bought from Roust Trading Ltd (combines alcoholic assets Tariq) 23% of the 9.35 billion rubles. the authorized capital of the company "Russian Standard Vodka" (producer of vodka "Russian Standard" and the owner of the brand of the same name).

Then the bank in dire need of basic capital: in 2014 and in the first quarter of 2015. "Russian Standard" has shown a record loss of 15.9 billion rubles. and 22 billion rubles. respectively, as a result of its capital ratio according to IFRS are zeroed. Losses hit on the adequacy of the capital base, to avoid violations of standards was only due to the restructuring of subordinated bank bonds, whereby at the end of 2015 & LAQuo; Russian Standard "was able to make a profit to 16.5 billion rubles.

In 2016, "Russian Standard" has returned a loss, losing for the first quarter to 2.3 billion rubles. The share of overdue loans in the portfolio of "Russian Standard" has exceeded 40%, follows from the bank's balance sheet as of March 1.

The restructuring of the holding of bonds will have no effect either on the "Russian Standard" bank nor on the company's alcohol group Rustam Tariq, says a representative of the holding company.

CEDC was based American entrepreneur William Carey and until 2008 specialized in the distribution of beer and spirits in Eastern Europe - mainly in Poland, where the headquarters. Shortly before the 2008 crisis, the company began its expansion in the Russian market: in 2008-2009, it is at the peak of prices acquired GC "Russian Alcohol" Sergei Generalov (four plants in Russia, the brand "Green Mark", "Talca" et al.), Parliament Sergei Kupriyanov Group (the same name vodka "Parliament") and distributor of wines Whitehall Mark Kaufman. All these absorption CEDC cost of $ 1.3 billion, which was Careyon the open market, selling three issues credit notes maturing in 2013 and 2016.

This turned out to be unsupportable debt - sale of CEDC vodka after buying Russian assets began to fall. In 2010, the CEDC for the first time recorded a net loss of $ 104.78 million. In 2011, he was already $ 1.3 billion on revenue of $ 878 million. In 2012, at the conference-call Carey said that the company does not have the resources to repay the first issue of credit notes to $ 310 million in March 2013.

Roustam, which acquired 9.9% of the company for $ 25 million CEDC in November 2011, entered into negotiations to increase its stake in the company.

Holders of credit-linked notes issue maturing in 2016 received a total of $ 172 million in cash and $ 650 million of new notes maturing in 2018 (it covered 83.7% of the total of $ 982.2 million rights size requirements). Holders of the default release of $ 310 million maturing in 2013, received $ 25 million in cash and $ 30 million in bonds Roust Trading maturing in 2016. As a result, lenders lost $ 665.2 million - they were written off from the balance sheet when the reorganization through bankruptcy. General Tariq investment in CEDC takeover amounted to more than $ 420 million.

effuseYasya company continued generit loss: at the end of 2014 it amounted to $ 114.8 million, in 2015 - $ 53.3 million.