Deal agreed for Chinese to take back seized CEFC Czech assets
Just over one week after the dramatic takeover of the assets of the biggest Chinese investor in the Czech Republic, CEFC, a deal appears to have been sealed which should pave the way for a return to normal business. In the words of some Czech reports, the Czech-Chinese war is over.
The move was sparked by the non-payment of a reported 11 billion crowns in debt by CEFC by the deadline and J&T’s decision to exercise it’s legal rights to protect its interests. Companies covered by the seizure of control included all those grouped under the banner of Prague-based CEFC Europe. They included a major brewery, hotels, engineering company, Slavia Prague football club, and stakes in a major Czech tour operator, and media.
CEFC fortunes have appeared to be unfolding for months now with worries sparked by reports that its young founder was the subject of a criminal investigation in China. Some of the concerns had been answered by the news that Chinese state company CITIC would take a substantial stake in the Chinese-based CEFC as well as 49% stake in CEFC Europe.
And CITIC’s has played a crucial role in the peace deal with J&T by taking over all CEFC’s debt owed to J&T. CITIC will also replace CEFC as the owner of a 9.9% stake in J&T. Agreements between the two groups who should fill the boards of the Czech companies bought in a spending spree by CEFC should follow.
And, as if the events of just over a week ago had hardly happened, the Czech and Chinese groups say they will continue to look at ventures where they could cooperate and invest in in the future.
CEFC emerged as the flagship company for Chinese investments in the Czech Republic after Prague sought to reset relations with Beijing over the last five year in a bid to become the focus for Chine incoming investment in Central Europe. Many of the promised Chinese investment intentions failed to advance from the drawing board or statements of joint intent.