Atlantik Financial Markets to bail out failing Fischer empire

High summer, the time of holidays and travelling, has for the past few years been a time of uncertainty for many Czech holidaymakers. It is precisely at this time of year that travel agencies are most likely to go bust. Last week it transpired that the country's biggest travel empire, Fischer, considered a safe bet by many, had accumulated 400 million crowns in unpaid debt; two of its companies went into administration. Now, the owner Vaclav Fischer says he has found a strategic investor to help save his travel empire from collapse.

Atlantik Financial Markets to bail out failing Fischer empire

Vaclav Fischer, photo: CTK

Vaclav Fischer, former senator and a success story of Czech post-communist business, is reported to owe some 470 million crowns to Czech Airlines, the Czech Airport Authority, and Komercni banka bank. Last Wednesday, on court orders, bailiffs seized assets in two companies owned by Mr Fischer, worth some 300 million crowns. On Sunday, Mr Fischer announced he had struck a deal with the brokerage house Atlantik Financial Markets which says it will invest in the Fischer companies only on condition their forced administration is called off. In case the deal fails, Vaclav Fischer predicts a gloomy future for the country's travel business.

"I would like to stress that should Fischer travel or the air carrier Fischer Air go out of business, it would be such a serious situation that it would surely paralyse the whole tourist business in the Czech Republic and maybe even Central Europe."

Fischer Air, photo: CTK

The two companies in administration are Fischer Air, which leases three passenger jet planes, and Fischer Limited, which, among other things, sells sports and casual wear collections carrying the Fischer label. Both are 100 percent owned by the travel magnate. The travel agency Fischer has not been hit and remains profitable.

Some say that the bleak financial situation Mr Fischer got into may be a result of his overestimating his capabilities and expanding the Fischer empire much too fast. Vaclav Fischer himself has a different explanation.

"Our companies have been showing profit for a couple of years but are still burdened with losses from 2000. But last year they were forced by banks to reduce their loans by 400 million crowns, and so we ran into difficulties with payments of certain invoices."

Vaclav Fischer can now only hope that his creditors show enough leniency and cancel the administration of two of his companies and also that his strong reputation survives with Czech customers - as offices closed for the weekend on Friday, people were still buying package tours with Fischer Travel assured their investments are safe.