CEFC In Talks To Sell Off Czech Assets To Chinese State Owned CITICČTK
Prague/Beijing, Sept 3 (CTK) – China Energy Finance Corporation (CEFC) is in talks about sale of its Czech assets to Chinese state-owned CITIC Group but the price at CNY6.7bn (Kc21.8bn) does not include CEFC’s all Czech assets, a source from CEFC Group (Europe) Company told CTK.
The information about talks about the sale has been brought by South China Morning Post website, which refers to two informed sources.
The price is 44 percent lower than the book value of the assets in May when it reached EUR1.5bn (Kc38.6bn), South China Morning Post said.
The transaction is being finalised, the price includes only assets directly owned by CEFC Europe, the source told CTK.
The price thus does not include assets of CEFC subsidiaries, that is stakes in companies like Travel Service, Pivovary Lobkowicz Group and Empresa Media, it added.
CEFC is the biggest Chinese investor in the Czech Republic.
If South China Morning Post information is confirmed, CEFC assets in the Czech Republic will in fact be transferred to full ownership of China, that is to the Chinese Finance Ministry, which controls CITIC, said Cyrrus company analyst Lukas Kovanda.
He now expects two possible scenarios. CITIC will either get rid of most of CEFC assets because accumulation of such diverse assets under one roof does not make economic sense.
The second possibility is that CITIC will keep all the assets and will continue extending its activities in the Czech Republic by means of acquisitions and investments. Even in this case, Kovanda expects a fundamental change in investment and acquisition strategy.
CEFC owns stakes in several Czech companies, such as Pivovary Lobkowicz brewery, Travel Service air carrier, Invia.cz travel agency and Zdas Zdar nad Sazavou engineering and metallurgy company.
The company was brought to the Czech Republic by former defence minister Jaroslav Tvrdik. The Chinese parent company has picked the Czech Republic as the place for expansion to Europe.
CITIC Group was formed in 1979 as the first Chinese investment company with the aim to attract foreign capital, present modern technologies and introduce what is new in the world in management and operation of companies.