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KKCG ups Sazka stakes with Kč 2.8 billion bid

  12:01

Two creditors of indebted lottery firm Sazka have presented offers to counter those of Penta and E-Invest, as court names administrator

foto: © ČTKČeská pozice

The players circling around the indebted lottery firm Sazka are upping their bids in their attempts to wrestle control of the firm. Sazka’s largest creditor Radovan Vítek on Monday presented the firm’s shareholders with his own rescue offer: an immediate payment of Kč 1 billion for a 100 percent stake in the firm. Vítek’s offer is, however, conditional upon the agreement of all shareholders.

In addition to a one-off payment for their stakes, property tycoon Vítek is also offering funds to finance the Czech sports associations — the current owners of Sazka. “A part of the offer is a guarantee of funds for sports activities that will be based upon the gambling law being prepared and the obligation it contains for a certain percentage of profits to go toward public causes,” Sigma Olomouc football club co-owner Josef Lébr, who is acting as Vítek’s negotiator with the sports associations, said on Monday.

And another offer      

Later the same day, Karel Komárek, another large Sazka creditor, came with another offer. “The KKCG Group is prepared to immediately provide financial resources amounting to Kč 2.8 billion implemented by raising the company’s basic capital. The KKCG group would receive a shareholding of 67 percent,” Komárek’s KKCG Group announced in a press release.      

KKCG also says that it will guarantee the current shareholders an income of Kč 250 million a year from Sazka for the next 15 years, irrespective of the lottery firm’s performance. The group also promises that five years after restructuring Sazka it would raise the amount of earnings transferred to the sports associations by Kč 150 million annually: “Over 15 years the current shareholders of the company Sazka will receive a sum reaching Kč 11 billion in the form of takings from income for public causes!” KKCG said.   

Prior to Feb. 21, the investment group Penta and Martin Ulčák’s company E-Invest tabled a joint offer and reached a provisional cooperation agreement with Sazka’s management last week. The two potential investors pledged to pump Kč 2.5 billion into Sazka needed to ward off bankruptcy and stabilize the company’s finances. Initially, Penta and E-Invest said they only wanted a share of Sazka’s profits; last week, however, they began to demand ownership of a 51 percent stake, and the remaining 49 percent as collateral.  

Interim administrator

Also on Monday, the Prague Municipal Court agreed to one of three proposals relating to Sazka within the framework of the bankruptcy proceedings launched against the company by Vítek on Jan. 17. Last week, Vítek and Komárek put three proposals to the court: the imposition of provisional bankruptcy measures; the nomination of an interim committee of creditors; and the nomination of an interim administrator.

The court agreed to the last demand and named Josef Cupek as interim administrator. Cupek’s task is to prevent the sell-off of the company’s assets and conduct an audit of the company’s accounts.   

Sazka’s management welcomed the court’s decision. “Sazka is ready to cooperate fully with the interim administrator. At the same time we deem it necessary to point out that the court rejected most of the demands of Cyprus-registered KKCG Structured Finance, including the proposal to name an interim committee of creditors, and has enabled Sazka to continue to control its property and assets and conduct all financial operations in line with the bankruptcy law,” Sazka spokesman Jan Tuna said in reaction to the court’s decision.          

Tuna also said that Sazka on Monday had paid off a bond obligation amounting to €4 million, which was due in January. “Meeting the bond payments is one of the steps of the strategic partnership with the companies E-Invest and Penta, Tuna said in the press release. Sazka is due to pay off another bond payment of €4 million and pay interest amounting to €8.8 in July.        

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