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Sazka: Petr Kellner enters the fray

  12:00

Sazka bondholders — including the Czech billionaire Petr Kellner — are preparing to apply pressure for quicker repayment

Petr Kellner a jeho skupina PPF dosud stáli v boji o Sazku v pozadí. foto: Česká pozice

Events surrounding Sazka, the number one Czech lottery firm, have been notched up a couple of levels. Apart from Radovan Vítek and Karel Komárek Jr., some Sazka bonds are also held by Petr Kellner, the owner of the PPF group and the richest Czech, according to news server Aktualne.cz.

Companies belonging to these billionaires together reportedly control almost 60 percent of the bonds, which is enough for them to take the radical step of implementing their immediate repayment.

Lawyers in London and other locations are said to have sent an informational letter notifying Sazka that they are using an option in the bonds’ fine print that allows them to demand quicker debt repayment.

News server iHned.cz claims that the Petr Kellner PPF group has been conducting intensive negotiations with one of Sazka’s largest creditors, real estate magnate Radovan Vítek. According to Aktualne.cz’s sources, firms owned by him have bought up bonds in the past.  

It is not the first time that Kellner’s name has appeared in public in connection with the bonds.

It is not the first time that Kellner’s name has appeared in public in connection with the bonds. In the middle of January, Czech Position reported on the calm before the storm that had prevailed up to then in Prague 6, where PPF is headquartered. PPF spokesman Milan Tománek has now confirmed Czech Position’s information from the end of February to iHned.cz. “For the time being, we are monitoring Sazka’s current situation and carefully appraising the matter,” he said, declining to make any further comment.

Vítek is negotiating with PPF’s investment director, Martin Štefunko. He is allegedly in charge of Sazka within the group. This would be logical in view of his previous involvement with the financial group Penta Investments, where he was responsible for gambling firm Fortuna, among other projects. “I speak with Martin, but about real estate business, not about Sazka,” Vítek told the iHNed. Vítek holds receivables owed by Sazka with a nominal value of around Kč 3 billion.

Sazka: We will fight our corner

So far, Sazka has not commented in detail on the repayment of bonds. “But if it happens, we will defend ourselves in the courts because Sazka has already repaid everything that should be repaid as far as bonds are concerned,” spokesman Jan Tuna said. The firm makes two annual bond repayments — in January and in July. It made a delayed payment for January thanks to a €400,000 loan from Penta and Martin Ulčák’s financial firm E-Invest.

Sazka has already repaid everything that should be repaid as far as bonds are concerned.

Sazka bonds were issued in the amount of €215 million (around Kč 5.2 billion). So far, the firm has only repaid 8 percent of their original value. Should the holders want these to be repaid immediately, this debt would be added to the other claims declared by creditors in the course of insolvency proceedings.

International consultancy KPMG has been advising the bondholders since January. It would also give them advice on any possible restructuring, if this method of saving the firm was ordered by the Municipal Court. Cases where firms are rescued in insolvency by being reorganized are very rare in the Czech Republic because creditors have to consent to this process and are often against such a move. 

In Sazka’s case, however, according to lawyers who have been canvassed on the subject, this move would make sense because it has solid prerequisites for debt reduction while the firm is being rescued. It could then become one of the few examples of a successful restructuring during insolvency. What is certain is that, if bankruptcy is declared, none of the creditors will see 100 percent of the receivables Sazka owes them.

What is currently encumbering Sazka

  • According to information in the Insolvency Register, Sazka does not have enough funds for routine activities. Its inability to pay the winners of a jackpot exceeding Kč 103 million is also connected with this.
  • Insolvency trustee Josef Cupka does not intend to support Sazka’s request for the court to authorize a loan amounting to Kč 2.5 billion from the firm Gladiolus (backed by E-Invest and Penta).  
  • Aleš Hušák was hospitalized due to exhaustion and sudden weakness March 15 after an extraordinary company general meeting, where he defended his position. Sazka spokesman Jan Tuna late on March 16 told Czech Position: “He is connected to a drip, and the necessary examinations are being conducted. It is probably due to exhaustion. At this moment, it is not possible to estimate how long the period of hospitalization will be.” 
  • T-Mobile Czech Republic spokesman Martina Kemrová confirmed that Sazka owes the mobile operator more than Kč 50 million. Furthermore, according to daily Mladá fronta Dnes, it owes Kč 4.4 million to water management firm Veolia, almost Kč 2 million to energy firm ČEZ, and Kč 2.2 million to the firm Manum, which operates payment systems for Sazka.
  • On March 15, Sazka employees went on strike alert. According to the firm’s union boss Jan Kašpárek, this is because they are losing confidence in the future of the company and fear for their jobs. He later added that it was not about a lack of faith among employees in the company’s management.
  • According to the Ministry of Finance’s communications department, Finance Minister MIroslav Kalousek (TOP 09) and his deputies intend to acquaint themselves in detail with the situation in Sazka at the earliest opportunity. Kalousek issued a directive to the Prague 1 revenue authority for it to ascertain whether Sazka is capable of meeting all the conditions of a lottery license. “The regulator is certainly not interested in destroying the firm,” he said. “Its interest lies in protecting consumers.”

You can also read the latest events surrounding Sazka here:
Sazka: Hušák asked to halt lottery activities
Sazka has new Kč 2.5 bln loan
KKCG ups Sazka stakes with Kč 2.8 billion bid
Poll: People not willing to bet on Sazka’s Hušák

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