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bne April 2018 Companies & Markets I 11
“The company still has as one of its major priorities the projects in Czechia. The proof is that a very strong Chinese company with vast assets in China and abroad is entering CEFC as a minority shareholder,” Ovcacek said.
CITIC’s expected investment is likely to be related to the financial problems as reported by Reuters on March 12. CEFC was reportedly prepared to pay astronomical annual rates for short-term funding from non-traditional lenders. In January, CEFC borrowed CNY1bn (€130mn) from the Shanghai-based Bida Holding Group, also known as U.Trust Holding Group, for a 15-day loan with a daily interest rate of 0.1%, equivalent to an annual interest rate of 36%, said the newswire, citing a person with direct knowledge of the matter.
CEFC has also announced that the latest deal with Slovak- founded financial group J&T Finance Group (JTFG) is not happening, at least for now. Previously, CEFC and J&T
had agreed that the Chinese group would raise its stake in J&T from 10% to 50%. But, given the current change in the shareholders' structure, CEFC is withdrawing a request to the Czech National Bank (CNB) to grant a permission to this deal.
Although the deal got a green light from the Czech anti- monopoly office (UOHS) in May 2017, the CNB refused to give its permission for the deal, which includes J&T Bank, until it was given more information about the source of the group's funds.
Despite CEFC backing away from the J&T transaction, “The mother company CEFC China still regards the projects in Czechia as a priority,” stated a spokesman for CEFC Europe, Pavel Bednar.
“The development of our projects will continue, and we are looking forward to cooperating with our new shareholder. We see a synergy between its activities and activities of CEFC Europe not only in China but over the word,” added executive vice-president of CEFC Europe Marcela Hrda.
Even with the reports about a possible investment by CITIC, the fate of the Chinese company’s money in Czechia is at best uncertain, and the debacle is also problematic politically, as Prague Castle has already been criticised for its relationship with a dubious Chinese company.
Little is known about CEFC, despite its high-profile activity in the Czech Republic and elsewhere in the region. Jianming was, according to the Czech media, introduced to Zeman by Tvrdik. Tvrdik was Zeman's former minister of defence when the latter was premier, and since 2014 he has been a pro- Chinese lobbyist.
Tvrdik is also a co-president of the Czech-Chinese chamber, which is supported by the PPF group owned by Peter Kellner, the wealthiest Czech. Other people from Zeman’s inner circle – specifically Mynar and Nejedly – have been also connected
to the Chinese company.
Russian IT major IBS prepares $100mn IPO
bne IntelliNews
Russian IBS IT Services plans to raise over $100mn
at an IPO on Moscow Exchange (MOEX) to develop business solutions and consulting segments, Bloomberg and Vedomosti daily reported on March 1 citing unnamed sources.
"We are in the midst of a digital transformation and things are moving extremely quickly,” IBS CEO Svetlana Balanova recently told bne IntelliNews in an exclusive interview.
In 2013 IBS decided to spin off the international business and set up Luxoft that focuses on international clients, which held an $80mn IPO in May 2013. IBS deals with Russian clients.
Today, Luxoft with capitalisation of $1.45bn is the number one international software company in many of its niches and holds a large share of the US automotive and aviation software markets, to give two examples.
Now IBS could reportedly hold another IPO already in April, with Citigroup and Renaissance Capital hired as possible organisers of the offering.
Currently the company is providing system integration services, tailoring software of external vendors such as SAP or Cisco Systems to the needs of their clients. The funds raised from the IPO could be used to develop own services for large corporations, Balanova told bne.
IBS CEO Svetlana Balanova
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