Update: Prague Approves Citic Takeover of CEFC China’s Czech Assets
The Czech Republic approved the takeover of CEFC China Energy’s Czech assets by China’s state-owned Citic Group, which is stepping in to bail out the embattled conglomerate since its founder was placed under investigation early this year.
The takeover deal won a green light from the Czech government without a final price or terms, Citic Chairman Chang Zhenming said Wednesday at a briefing on Citic’s first-half earnings.
There are still uncertainties regarding the deal before the price is settled, Chang said, adding “there is still a long way to go.”
CEFC China is one of China’s rapidly expanding private conglomerates that have amassed sprawling assets abroad over the past few years through debt-backed investments.
CEFC China has made a wide array of investments in the Czech Republic, including a stake in Czech banking and private equity giant J&T. Through its Prague-based subsidiary CEFC Europe, the company also owns Czech charter airline Travel Service, owner of the national carrier Czech Airlines; brewery group Lobkowicz; hotels and office buildings; the machinery company Zdas; and first-division soccer club Slavia Prague. CEFC China founder and Chairman Ye Jianming was named an economic policy adviser for Czech President Milos Zeman.
But CEFC China has been under regulatory and financial pressure since Ye was put under investigation by Chinese authorities on suspicion of economic crimes. The news has triggered a series of downgrades in ratings for CEFC China’s units, leading to the abandonment of a bond sale, the freezing of assets by several courts and the collapse of a $9 billion deal to buy a stake in Russian state-owned energy giant Rosneft.
Last week, China’s top securities regulator opened a probe of CEFC China’s Shenzhen-listed unit CEFC Anhui International Holding for making false statements in its 2017 annual report.
In March, CEFC Europe said in a statement that Ye stepped down as a shareholder and executive of the company. Because of the changes in the company, CEFC China withdrew its request to the Czech central bank to raise its stake in J&T to 50%, CEFC Europe said at the time.
In May, the executive director of Citic unit Rainbow Wisdom Investments Ltd. took over CEFC Europe’s chairmanship, signaling Citic’s intention to step into CEFC China’s Czech operations.
In June, Citic reportedly filed the application with Czech competition watchdog UOHS for a buyout of CEFC China’s Czech assets.
Chang told media Wednesday that the takeover is an effort to stabilize market expectations relative to Chinese investment in Europe.
On Wednesday, Citic said its main business arm Citic Ltd.’s first-half revenue rose 29.2% from a year earlier to HK$258.3 billion ($32.90 billion). Net profit dropped 4.9% to HK$30.7 billion. Energy business contributed HK$1.3 billion of net profit to the company, boosted by rising commodity prices and a narrowing loss at an Australian iron ore project.
Contact reporter Han Wei (email@example.com)
Jul 17 17:33
Jul 17 17:27
Jul 17 17:29
Jul 17 16:31
Jul 17 16:28
Jul 17 13:48
Jul 17 13:50
Jul 17 12:57
Jul 17 11:44
Jul 17 09:00
Jul 17 09:19
Jul 17 02:19
Jul 17 02:36
- 1Exclusive: Huawei Smartphone Manufacturer Halts Production at Changsha Plant, Sources Say
- 2Controversial Chinese Blockchain Entrepreneur Invites Trump to Buffett’s Charity Lunch
- 3 Seven Foreign EF Teachers Reportedly Among 19 Detained for Drug Offenses
- 4In Depth: Camsing Fraud Allegations Spotlight Supply-Chain Finance
- 5Starbucks Launches New Takeout-Focused Concept Store — With ‘Limited’ Seating
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas