14. Borrowings

Bank Facilities

As of December 31, 2011, the Company had total bank overdraft facility of PLN 23.8 million ($7.0 million) from Bank Zachodni WBK S.A. and Bank Handlowy w Warszawie S.A. of which PLN 20.0 million ($5.9 million) was drawn and PLN 3.8 million ($1.1 million) was available in Poland. Based on the original agreement the overdraft was to be paid off on December 17, 2011. This term was extended until January 15, 2012 based on the amendment dated April 21, 2011. On January 15, 2012, this facility was fully repaid and closed.

As of December 31, 2011, the Company has outstanding liability of €28.5 million ($36.8 million) from the term loans from Zenit Bank, Alfa Bank and Raiffeisen Bank drawn by Whitehall.

The loan agreement with Zenit Bank dated March 29, 2011, matures on June 6, 2012. The credit limit under this loan agreement is €10 million ($12.9 million) and the loan is released in tranches maturing in 365 days, no later than March 29, 2012. The loan was released in six tranches between March 29, 2011, and September 13, 2011, repayable between February 17, 2012 and May 18, 2012. As of December 31, 2011, the Company has outstanding liability of €8.5 million ($11.0 million) from this term loan.

The loan agreement with Alfa Bank dated July 22, 2008, matures on November 16, 2013. The credit limit under this agreement is €15 million ($19.4 million) and the loan is released in tranches maturing within three, six or nine months, depending if they are pledged on inventory. The loan was released in eight tranches between April 6, 2011, and December 28, 2011, repayable between January 6, 2012 and May 7, 2012. As of December 31, 2011 €10 million ($12.9 million) of this limit was granted to the Company. The Company repaid the first three tranches amounting to €4 million ($5.2 million) in January 2012.

The loan agreement with Raiffeisen Bank dated July 6, 2010, matures on July 6, 2012. The credit limit under this agreement is €10 million ($12.9 million) and the loan is released in tranches maturing within five to six months. The loan was released in eight tranches between March 15, 2011, and December 26, 2011, repayable between March 15, 2012, and July 6, 2012. As of December 31, 2011, the Company has outstanding liability of €10 million ($12.9 million) from this term loan.

The aforementioned loans drawn by Whitehall have no financial covenants that need to be met and are guaranteed by Whitehall companies. The loans from Zenit Bank and Alfa Bank are also secured on the Company's inventory.

As of December 31, 2011, the Company also has outstanding total liability of 1,146.9 million Russian rubles ($35.6 million) from term loans from Unicredit and JSC Grand Invest Bank, as well as, an overdraft facility from Deutsche Bank drawn by Russian Alcohol.

The loan agreement with Unicredit dated May 24, 2011, matures on November 27, 2012. This loan has no financial covenants and is secured by goods up to 720 million Russian rubles ($22.4 million) and guarantees given by companies of Russian Alcohol. As of December 31, 2011, the Company has outstanding liability of 600.0 million Russian rubles ($18.7 million) from this term loan.

The loan agreement with JSC Grand Invest Bank dated November 25, 2011, matures on November 23, 2012. This loan has no financial covenants that need to be met. As of December 31, 2011, the Company has outstanding liability of 297.0 million Russian rubles ($9.2 million) from this term loan.

The overdraft agreement with Deutsche Bank dated November 10, 2011, matures on November 10, 2012 and was drawn primarily to service purchases made to satisfy the an import contract with Brown-Forman. The credit limit under this agreement is 250 million Russian rubles ($7.8 million). This loan has no financial covenants and is guaranteed by Brown-Forman. As of December 31, 2011, the Company has outstanding liability of 249.9 million Russian rubles ($7.8 million) from this overdraft.

As of December 31, 2011, the Company had available to use under existing overdraft facility in Hungary approximately 450.0 million Hungarian forints ($1.9 million) from an overdraft available in Hungary.

Convertible Senior Notes

On March 7, 2008, the Company completed the issuance of $310 million aggregate principal amount of 3% Convertible Senior Notes due 2013 (the "Convertible Senior Notes"). Interest is due semi-annually on the 15th of March and September, beginning on September 15, 2008. The Convertible Senior Notes are convertible in certain circumstances into cash and, if applicable, shares of our common stock, based on an initial conversion rate of 14.7113 shares per $1,000 principal amount, subject to certain adjustments. Upon conversion of the notes, the Company will deliver cash up to the aggregate principal amount of the notes to be converted and, at the election of the Company, cash and/or shares of common stock in respect to the remainder, if any, of the conversion obligation. The proceeds from the Convertible Senior Notes were used to fund the cash portions of the acquisition of Copecresto Enterprises Limited and Whitehall.

As of December 31, 2011 the Company had accrued interest of $2.7 million related to the Convertible Senior Notes, with the next coupon due for payment on March 15, 2012. Total obligations under the Convertible Senior Notes are shown net of deferred finance costs, amortized over the life of the borrowings using the effective interest rate method as shown in the table below:


	December 31,			December 31,
	2011			2010
Convertible Senior Notes	$	310,000		$	310,000
Unamortized debt discount		(1,070	)		(2,311	)
Debt discount		(4,285	)		(8,567	)

Total	$	304,645		$	299,122

The ASC Topic 470-20 requires the issuer of convertible debt instruments with cash settlement features to separately account for the liability ($290.3 million as of the date of the issuance of the CSNs) and equity components ($19.7 million as of the date of the issuance of the CSNs) of the instrument. The debt component was recognized at the present value of its cash flows discounted using a 4.5% discount rate, our borrowing rate at the date of the issuance of the CSNs for a similar debt instrument without the conversion feature. The equity component, recorded as additional paid-in capital, was $12.8 million, which represents the difference between the proceeds from the issuance of the CSNs and the fair value of the liability, net of deferred taxes of $6.9 million as of the date of the issuance of the CSNs. ASC Topic 470-20 also requires an accretion of the resultant debt discount over the expected life of the CSNs, which is March 7, 2008 to March 15, 2013. For the year ended December 31, 2011, December 31, 2010 and December 31, 2009, the additional pre-tax non-cash interest expense recognized in the consolidated statement of operations was $4.3 million, $4.1 million and $3.9 million, respectively. Accumulated amortization related to the debt discount was $15.4 million and $11.1 million as of December 31, 2011 and December 31, 2010, respectively. The annual pre-tax increase in non-cash interest expense on our consolidated statements of operations to be recognized until 2013, the maturity date of the CSNs, amounts to $4.3 million.

Senior Secured Notes due 2016

On December 2, 2009, the Company issued $380 million 9.125% Senior Secured Notes due 2016 and €380 million ($491.1 million) 8.875% Senior Secured Notes due 2016 (the "2016 Notes") in an unregistered offering to institutional investors. The Company used a portion of the net proceeds from the 2016 Notes to redeem the Company's outstanding 2012 Notes, having an aggregate principal amount of €245.4 million ($317.1 million) on January 4, 2010. The remainder of the net proceeds from the 2016 Notes was used to (i) purchase Lion Capital's remaining equity interest in Russian Alcohol by exercising the Lion Option and the Co-Investor Option, pursuant to the terms and conditions of the Lion Option Agreement and the Co-Investor Option Agreement, respectively (ii) repay all amounts outstanding under Russian Alcohol credit facilities; and (iii) repay certain other indebtedness.

On December 9, 2010, the Company issued an additional €50.0 million ($64.6 million) 8.875% Senior Secured Notes due 2016 (the "2016 Notes") in an unregistered offering to institutional investors. The Company used the net proceeds from the additional 2016 Notes to repay its term loans and overdraft facilities with Bank Handlowy w Warszawie S.A and Bank Zachodni WBK S.A.

As of December 31, 2011 and December 31, 2010 the Company had accrued interest of $7.0 million and $7.1 million respectively, related to the Senior Secured Notes due 2016, with the next coupon due for payment on June 1, 2012.


	December 31,			December 31,
	2011			2010
Senior Secured Notes due 2016	$	935,971			955,296
Unamortized debt discount		(3,207	)		(3,660	)

Total	$	932,764		$	951,636

The following table presents repayment schedule related to principal amounts of our Convertible Senior Notes, Senior Secured Notes and all bank loan facilities.


	December 31, 2011
2012	$	78,504
2013		304,645
2014		0
2015		0
2016 and beyond		932,764

Total	$	1,315,913