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Central Europe
May 25, 2018 www.intellinews.com I Page 11
China's CEFC to fight takeover of Czech-based subsidiary by creditor J&T Private Investments
bne IntelliNews
The Czech-based division of troubled conglomer- ate CEFC China Energy is fighting a takeover by creditor J&T Private Investments (JTPI), saying it has the funds to repay its debt and will take legal action to reinstall its management.
CEFC Europe assets include Czech charter airline Travel Service, owner of national carrier Czech Airlines; the brewery Lobkowicz; first division football club Slavia Prague; and hotels and office buildings. Its investment drive was promoted by Czech President Milos Zeman and his inner circle, keen to deal with Beijing.
JTPI said on May 17 it had installed crisis man- agement at CEFC Europe because it failed to pay back its debt of €450mn in time. The Chinese company said it will contest the takeover of shareholder rights.
“CEFC Europe shareholders don’t recognise the dismissal of the current board and the appoint- ment of a new one, and they are ready to make all legal steps against J&T group,” the company said.
A battle of words and Twitter posts has ensued between CEFC’s representative in Czechia, former defence minister Jaroslav Tvrdik, and J&T Group co-owner Patrik Tkac.
Tvrdik said repeatedly over the weekend that CEFC
In happier times: CEFC was chief partner at last year's China Investment Forum in Prague, where the firm cultivated ties with top level Czech officials.
Europe had secured funds from Chinese state conglomerate CITIC Group to pay the money back but JTPI had left no possibility for the payment to be made by the deadline of 1200 GMT on May 18. Tkac said Tvrdik had only submitted interlocutory injunctions.
CITIC Group has been taking steps to take a 49% stake in CEFC Europe. Before its troubles, parent company CEFC was looking to increase its stake in Czech and Slovak financial group J&T Finance Group (JTFG) from 10% to 50%.
CEFC has been particularly active in the Czech Republic, where its chairman Ye Jianming was appointed an adviser to president Milos Zeman in 2015 — a position he has retained despite the investigation. CEFC bought a series of medium- sized Czech and Slovak assets in something of a frenzy that same year, though it has since largely slipped back behind the scenes.
CEFC has risen from relative obscurity in recent years. It has struck increasingly eye-catching en- ergy and finance deals across Central and East- ern Europe, the Middle East, Russia and Chad, but since landing its biggest deal yet last September— an agreement to acquire a $9bn stake in Russian state energy giant Rosneft—its fortunes have been unravelling since Ye came under investigation for suspected economic crimes.