State juggles stake in Czech flag carrier as Chinese suitor waits in the wings

By bne IntelliNews April 4, 2016

State-owned Czech Aeroholding plans to transfer its remaining 19.7% stake in struggling national carrier Czech Airlines (CSA) to state firm Prisko, local press reported on April 4. The move is speculated to be a step towards full privatisation of the flag carrier.

The planned share-transfer is in line with an agreement with the two other CSA shareholders, Korean Air - which has a 44% stake - and Czech budget carrier Travel Service, which bought a 34% stake in CSA from Czech Aeroholding last year. The transfer has not yet been approved, E15 reports.

"The aim is to ensure, through companies belonging to Czech Aeroholding, the further development of the Vaclav Havel Airport in Prague," ministry of finance spokeswoman Katerina Vaidisova said. Prisko was founded by the National Property Fund and is controlled by the finance ministry.

Korean Air has thus far shown no appetite to exercise its option for Czech Aeroholding’s remaining stake in CSA. Current EU regulations prevent any company from outside the bloc holding a stake above 49% in EU airlines, although Brussels does maintain a loophole for exceptions on a negotiated case by case basis.

Likely waiting in the wings is the China Energy Company Limited (CEFC) conglomerate, which has been on a buying spree on stakes in Czech and Slovak assets. CEFC has a 10% stake in Travel Service and plans to buy an additional 39.92% stake. In March it bought a stake in Invia, the Central European online travel agency, as part of a move to build up a travel and accommodation services chain for Chinese visitors and investors to Prague and around Central and Eastern Europe.

According to the Czech Republic’s most prominent Sinophile, President Milos Zeman, CEFC is considering buying Korean Air’s 44% stake. The head of state made the claim ahead of last month’s official visit by Chinese counterpart, Xi Jinping.

Former CSA chief executive Jaroslav Tvrdik is now the top CEFC representative for Europe, while CEFC chairman Ye Jianming is an aide to Zeman. "The presidential office is beginning to look like a subsidiary of CEFC", which "now has even more people in Zeman's office than Russia's Lukoil," Hospodarske Noviny claimed late last year, referencing common claims during Zeman's time as prime minister in the middle of the last decade that the Russian oil company was a major sponsor of his premiership.

Travel Service operates regular budget flights under the brand name SmartWings, and also provides charter flights. The company now claims to be the biggest Czech airline and carried 5.7mn passengers last year.

Related Articles

Hungarian PM's "proxy" moves into the nuclear industry as Paks tenders approach

Firms controlled by Hungarian oligarch Lorinc Meszaros have purchased a 51% stake in the Hungarian subsidiary of Czech nuclear ... more

Czech PM accepts new nominee for finance minister

Reducing the political tension in the country a little, Czech Prime Minister Bohuslav Sobotka accepted on May 17 the nomination of a new finance minister from coalition partner Ano. Meanwhile, ... more

RBI doubles net profit y/y in Q1 as Russian business recovers

Raiffeisen Bank International (RBI), the second largest bank operating across Central and Eastern Europe by assets, reported that net profit almost doubled year-on-year to €220mn in the first ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss