PPF still has the deal-making mojo after death of founder Petr Kellner

PPF still has the deal-making mojo after death of founder Petr Kellner
Petr Kellner was a deal-making legend and by far the most famous and successful Czech businessman of his generation.
By Robert Anderson in Prague January 11, 2022

PPF, the adventurous Czech investment group founded by the late billionaire Petr Kellner, could be poised to divest one of its last major assets in Russia, a country in which it has been one of the biggest foreign financial players for the past 20 years.

Russian investment giant Sistema is reported to be close to buying PPF’s consumer finance unit Home Credit’s operations in Russia and Kazakhstan, after earlier speculation that Hungary’s OTP Bank was the favoured buyer.

The report of the sale – which neither side has confirmed – comes after speculation over several months that the unit was for sale. These rumours were boosted by PPF commenting last month  that the group was looking to sell operations, or partner them with other companies, in markets with “limited potential". 

The potential sale of what has been one of PPF’s crown jewels has naturally sparked speculation that CEO Ladislav Bartonicek is having a clearout of assets and is narrowing the group’s focus following the death of Kellner in a helicopter crash in March last year. 

PPF insiders confirm that a lot of deals are currently in the pipeline, raising the question of what the group’s investment strategy now is, and what other businesses among the group’s €40bn of assets might be up for grabs.

Deal-making legend

Petr Kellner was a deal-making legend and by far the most famous and successful Czech businessman of his generation.

The richest man in Central Europe, with a personal wealth estimated at $17.5bn by Forbes, he made his fortune in the ‘Wild East’ of the Czech transformation from Communism in the early 1990s, becoming a major regional player in consumer finance, telecoms and media.

He was also one of the first regional tycoons to outgrow the local markets and expand globally. After launching the Home Credit consumer finance format in Central Europe in 1997, he expanded it east to Russia in 2002, and then from 2007 into China, making it the world’s largest non-banking consumer lender.

In Russia, Kellner diversified into real estate, agriculture (Rav Agro), electronics retail (Eldorado) and gold mining (Polymetal), as well as insurance, by swapping stakes – and sometimes going head to head – with the country’s powerful oligarchs.

But even before his death last year PPF was beginning to shift its assets away from Russia and Asia and back into developed European markets – in particular the Czech Republic itself – as well as the Balkans.

PPF has been selling down its Russian assets gradually over the past decade, reducing its stake in Polymetal and disposing of the Eldorado electronics and domestic appliances chain in 2016. But the sale of Home Credit Russia would be a huge step-up in this disposal programme.

Arguably this shift has been accelerated by PPF's decline in political influence following the death of Kellner, and by the reverses for Czech President Milos Zeman's foreign policy of pursuing closer links with Beijing and Moscow. Kellner had forged a bond with Zeman, especially over PPF's drive into China, and the billionaire even gave the president a lift back in a private jet from a trip to China in 2014. This kind of political support and 'cover; is just no longer available or possible.

Cutting exposures

There is now speculation that as well as Home Credit Russia, PPF is targeting disposals of Home Credit’s Asian operations in India, Vietnam, Indonesia and the Philippines. Bloomberg has reported that those assets could be worth up to $2.5bn.

In China PPF is reducing its exposure and is rumoured to be looking for a partner. Home Credit operating revenue there fell to €725mn in the first half, from €1.6bn a year ago, under pressure from Beijing’s restrictions on banks’ access to local funding sources.

PPF’s disposals partly reflect Home Credit’s struggle in Russia, China and India with problem loans, which has been accentuated by the outbreak of the coronavirus (COVID-19) pandemic. PPF made its first ever loss in 2020 of €291mn because of impairments at Home Credit. By refocusing on more developed markets, PPF can diversify its portfolio and stabilise its returns.

PPF CFO Katerina Jiraskova said in November that the pandemic had hit Home Credit hard but that the PPF group’s diversification had enabled it to bounce back to make a net profit of €208mn in the first half of 2021.

“PPF’s first half-year results demonstrate that the group is able to withstand the immediate and lingering effects of the COVID pandemic through the sectoral and geographic diversification of its portfolio. Having recorded profitability for two consecutive half-year periods, PPF is ready to undertake new transactions while investing in its existing assets,” she said.

Opportunistic investments

Already as part of its gradual shift back into Europe, PPF has in the past few years bought assets from major European and US companies, becoming a major presence in CEE telecoms through acquisitions from Telefonica and Telenor, bringing with it 18mn customers across Czechia, Slovakia, Bulgaria and Serbia, as well as the purchase of regional TV group CME with a potential 45mn viewers in Czechia, Slovakia, Bulgaria, Romania and Slovenia.

Insiders say new CEO Ladislav Bartonicek, who was with Kellner at PPF since the beginning, has continued in the direction set by the tycoon of focusing on more mature markets whilst also keeping an eye on opportunistic deals.


Since Kellner’s death the acquisition and investment drive has continued unabated, notably with the acquisition by reverse takeover of the Czech lender Moneta Money Bank. By combining Moneta with PPF’s digital bank Air Bank, Kellner’s dream of building a major Czech-owned bank has finally been fulfilled. The combined banking group will have a total of 2.5mn customers in a country of 10.7mn people, putting it in third place in terms of customers, and ranking it second in consumer finance.

At the same time, the group has continued to make opportunistic investments outside its favoured finance, telecoms and media sectors, in segments where it sees the chance to pick up assets cheaply and consolidate a fragmented market.

It created a sailboat charter joint venture with France’s Groupe Beneteau to consolidate the fragmented charter boat market. It has become the biggest player in a sector struggling because of COVID-19, but one potentially with bright prospects as rising wealth allows middle-class clients to use sailboat charters as a kind of nautical Airbnb.

PPF has also made a contrarian bet on the revival of the office real estate market, making a deal in Florida worth around $315mn and another in Georgia worth more than $100mn, and entering the Polish market with the acquisition of the New City business park in Warsaw last month.

As part of the disposal of its stake in Czech retail internet site Mall.cz, PPF has also built a consumer electronics merchant Fast CR, with its Planeo Elektro retail chain and its own brand Sencor,  in which it has a 40% shareholding.

At the same time, PPF has been investing significantly in its own businesses, putting €280mn into its biotech arm Sotio, hiring top Western European talent for engineering company Skoda B.V. (not related to the carmaker), and investing CZK27bn (€1.11bn) since 2015 into regional telecom infrastructure unit Cetin’s network.

PPF is also building up regional TV group CME’s Voyo streaming service by acquiring and commissioning new content. The relaunched Voyo service will now offer a locally customised regional streaming platform of films and TV shows.

To reduce leverage, PPF has also made several disposals in the telecoms sector. It sold a 30% stake in Cetin to Singapore’s state investment fund GIC, in a deal estimated to be worth around €2.5bn. It has also recently sold Telenor Montenegro, which was deemed too small to offer significant growth potential.

What would Kellner do?

Bartonicek, in a recent interview with Czech Forbes, admitted that he still sometimes asked himself what Kellner would do, and that he was more cautious than the famous dealmaker.

“He was a bigger risk taker, that’s for sure. It has to do with the fact that when you are an absolute majority owner, your decision-making works a little differently. It depends on you. I’m partly responsible for my assets, but primarily for his family’s assets, so it’s different,” he told Forbes.

However, the spate of deals certainly demonstrates that PPF has not lost its mojo since the death of Kellner and its switch into developed markets.

Nevertheless, there is still speculation over the long-term future of the group, given that it is now 99% owned by Kellner’s widow, Renata Kellnerova, with Bartonicek running the operations of what is now almost a glorified family office.

Kellnerova – who inherited a fortune worth €14.7bn, according to Forbes – maintains an even lower profile than her late husband did, and little is known about how much oversight she exercises in the business. Wouldn’t she be more prepared to accept offers to sell out than if her husband were still leading the group?

With her showjumper daughter Anna regularly linked with Czech energy baron Daniel Kretinsky, there are also persistent rumours that the country’s most high-profile tycoon could soon exercise influence over PPF’s business strategy, after having often been a junior partner in Kellner's corporate raiding in the past.

If true, one might find PPF’s choice of investments becomes even more eye-catching and wide ranging, given Kretinsky’s punts on English football club West Ham United, French newspaper Le Monde, as well as the UK’s Post Office and supermarket chain J Sainsbury.