PRAGUE (Reuters) - CEFC Europe, a Czech-based division of troubled conglomerate CEFC China Energy, said it would contest a takeover of shareholder rights by creditor J&T Private Investments (JTPI), arguing it had funds to pay a debt at the centre of the dispute.
Czech-based JTPI said on Thursday it had taken over the rights and installed crisis management because CEFC Europe had not covered its debt, totalling 450 million euros according to CEFC, in time.
CEFC Europe assets include Czech charter airline Travel Service, owner of the national carrier Czech Airlines; brewery group Lobkowicz; hotels and office buildings; machinery firm Zdas and first division soccer club Slavia Prague.
However, the Czech business has been affected by problems at once rapidly expanding parent company CEFC China Energy.
The parent firm came under stress when it was reported that its founder Chairman Ye Jianming was being investigated for suspected economic crimes this year and the firm scrambled for financing.
CEFC Europe protested against JTPI’s move.
“CEFC Europe shareholders don’t recognise the dismissal of the current board and the appointment of a new one and they are ready to make all legal steps against J&T group,” CEFC Europe said in a statement posted on its website on Friday.
It said funds to repay the credit had been provided by Chinese state conglomerate CITIC. CEFC Europe’s now-deposed Vice-Chairman Jaroslav Tvrdik said on Twitter that J&T had acted to seize control before a deadline to make the payment by 1200 GMT on Friday.
CITIC has been in the process of taking a 49 percent stake in CEFC Europe, according to CEFC Europe and the Czech presidential administration. Calls to the media relations office of the Beijing-based CITIC went unanswered.
CEFC Europe bought Czech assets in the past three years from real estate to breweries under an investment drive promoted by Czech President Milos Zeman. CEFC founder Ye holds the post of an economic adviser to Zeman.
The vice-Chairman of co-creditor J&T Finance Group (JTFG), Patrik Tkac, said on Friday that the fight could be solved if the debt is repaid.
“We are ready to immediately accept a payment made in a legal way and hand over the keys,” Tkac said on Twitter.
A filing with the Czech business registry dated May 17 showed JTFG board member Dusan Palcr and Petr Kubik were appointed as CEFC Europe board members and the previous board was removed under provisions in a collateral contract between JTPI and CEFC.
CEFC China also holds a 9.9 percent stake in JTFG. It had tried to raise the stake to 50 percent but the attempt was first halted by the Czech National Bank and later abandoned.
Reporting by Robert Muller and Jan Lopatka; Additional reporting by Aizhu Chen in Beijing; Editing by Keith Weir