Fragment: "Its current stock will be cancelled..."

A bankruptcy court on Monday approved Central European Distribution Corp's bankruptcy exit plan, putting Russian billionaire Roustam Tariko on the verge of adding one of the world's largest vodka producers to his stable of companies.

Under the plan, green lighted in U.S. Bankruptcy Court in Wilmington, Tariko will receive all of the Polish company's newly issued stock in return for $277 million he is providing for the benefit of its creditors. The deal essentially creates an alliance between CEDC and Russian Standard Vodka, the rival vodka maker also owned by Tariko, according to a statement issued on Monday by CEDC.

The plan is expected to become effective on May 31, the statement said.

Tariko became chairman of CEDC, which makes Absolwent and Parliament vodkas, last year after striking a deal aimed at rescuing the troubled company. CEDC has a leading market share in Russia, Poland and Hungary, but ran into financial problems after restating its results.

Despite an investment by Tariko, CEDC continued to be dogged by a cash crunch. It filed for bankruptcy on April 7 with a plan to cede ownership to Tariko after he outmanoeuvred other potential investors for control of the company. Its current stock will be cancelled, and it will cease to be publicly traded, according to the statement.

"The court's approval of our financial restructuring is a very positive step forward," Tariko said in the statement. "The company's world-class brands are now able to continue to build on their success locally and globally."

Tariko adds CEDC to a group of investments that includes Russian Standard Corp, maker of the eponymous Russian Standard brand vodkas. CEDC will emerge from bankruptcy having shed $665 million in debt