CEDC Hammered By Russian Expansion

摘要

Once one of the great growth stories in Central and Eastern Europeannalcohol, Poland-based Central European Distribution Companyn(CEDC) built a great vodka business in Poland before embarking onnan aggressive spending spree in Russia as it looked to replicate itsnsuccess at home. To say that things did not work quite as plannednwould be an understatement. Where CEDC's NASDAQ-listed sharesnonce traded at close to US$75 in the lead-up to the global financialncrisis back in 2008, they are now at less than US$2 and the companynis believed to be battling to be de-listed. The expansion into Russianis at the root of the problem as a number of factors, including a weakneconomy in 2009, higher taxes, a general trend away from spirits,nand company-specific issues are thought to have severely damagednCEDC's business to the point where it looks like it might be rescuednby the Russian businessman Roustam Tariko - the founder ofnRussian Standard Vodka. CEDC borrowed extensively to pursuenits Russian project, and it is believed that Russian Standard's boardnwill assume operational control of CEDC to help stabilise its future.