Petr Kellner agrees to buy Skoda Transportation for reported €400mn

By bne IntelliNews November 27, 2017

Petr Kellner, Central Europe’s richest man, has agreed to buy Skoda Transportation, the Czech manufacturer of electric trains, trams and buses. The price was not disclosed, though business news website ihned said it was more than CZK10bn (€400mn).

Skoda Transportation (now unrelated to carmaker Skoda Auto) is Central Europe’s biggest manufacturer of rail vehicles and employs 5,300, mostly in Plzen and Sumperk.

PPF, Kellner’s investment group, has had little involvement in manufacturing in the past, focussing instead on finance and telecoms, but it has a history of opportunistic acquisitions that are then re-sold for a profit. Daily MFD speculated that Kellner will sell Skoda Transportation to a Chinese company such as CEFC, which has already made a series of acquisitions in the country.

PPF, which has assets of almost CZK35bn, said it has committed “to provide Škoda Transportation with an operating loan to finance the company's essential needs”.

Skoda Transportation was once part of the Communist state-owned engineering conglomerate Skoda Plzen, which had also once included Skoda Auto, now a highly successful subsidiary of Germany’s Volkswagen. Despite interest from Siemens and ABB, Vaclav Klaus’ centre-right government chose to privatise Skoda Plzen to chief executive Lubomir Soudek, with backing from state-run banks, but he failed to modernise the group and it became insolvent.

A controlling stake in the conglomerate was then sold by the bankruptcy trustee for a knock-down CZK800mn to opaque Swiss investment group Appian in 2003. Martin Roman, who was Skoda Plzen chief executive at that time, is often alleged to be the main owner of Appian, something the Czech manager has always denied.

Appian – which is under investigation in Switzerland over the murky privatisation of Czech coalminer MUS – has broken Skoda Plzen up into its various subsidiaries, selling them off to individual buyers in transactions that are each worth more than it paid for the whole conglomerate. Czechs Marek Cmejl and Jiri Divis, who are officially members of the shadowy Appian Group, were among the declared owners of Skoda Transportation before the agreed sale to PPF.

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