Leaving "El Dorado": will Czech billionaire Petr Kellner go away from Russia?

The owner of the largest fortune in the Czech Republic amounting to $11.4 billion, Petr Kellner, sells Eldorado, home appliances electronics retail chain, but says that he sees prospects on the Russian market, despite the crisis and sanctions.
Origin source
In late August, it was reported that a network of shops of home appliances and electronics "Eldorado" - the second in terms of revenue and number of stores the company of this market in Russia - can be offered for sale. The fact that the "Eldorado" is preparing to sell, RBC said the source in one of the investment funds and representative Emma Capital - owner of 20% of the retailer (ie Facipero Investments beneficiary). The most likely buyer is a group of market players' Safmar "Gutseriev family - Shishkhanov (former band BIN).

On the preparation of the transaction could be evidence of the fact that this summer, the network formally changed hands, but in fact we are talking about moving the ownership of the lower level - a Cyprus company Facipero Investments Limited its subsidiaries. "If the network owner really made a decision about its sale and conducts the appropriate negotiations, the release of the company from its business with the transfer to a separate offshore company looks like the most logical step to effectively structure the future deal" - explained Irina Adamova, lawyer board "Yukov and Partners & raquo ;.

The basic package of 80% of the securities "Eldorado" through two offshore companies (end of June - after one) belongs to the PPF Czech group, which also controls insurance companies, mobile operators, banks, has a stake in industrial enterprises. According to the annual report of the PPF, the end of 2015 the value of the corporation's assets reached € 21.6 Bln. The founder and owner of the PPF is a businessman Petr Kellner, who owns 98.92% of the company.

At the time of publication in March 2016 fresh rating Forbes rich state Kellner edition is estimated at $ 10.6 billion by the beginning of September, based on the rating of "real time", the figure had risen to $ 11.4 billion thus Kellner increased separation from the closest pursuer.. - businessman, politician and vice-premier Andrei Babishov - and strengthened its title of the richest man of the Czech Republic. Does the possible sale of "El Dorado" which Kellner, a longtime investor in Russia, once again turns the case here, as has already been done once shortly before the 1998 default?

Catch the nomenclature

Petr Kellner was born in May 1964 in the Czechoslovak towne Ceska Lipa. About its origin businessman tries not mention any business documents, or in multiple interviews. According to unconfirmed reports, his father's name was Joseph, and he worked in one of the local Research Institute - later worked there and the older brother of Peter Yan.

Just 25 km from the town of Ceska Lipa was the state border with the GDR. The area in which Childhood Kellner, located in the middle of the so-called Sudetenland, inhabited mainly by Germans. Just in the first few months after the defeat of Germany in World War II Czechoslovakia authorities began mass deportation of ethnic Germans from the Sudetenland and the settlement of cities in the region Slavs. Perhaps Kellner ancestors came from this wave of immigrants.

While Peter was still a child, the family moved from Ceska Lipa in the regional center Liberec. There's youngest son enrolled at the prestigious Central School of economic Liberec. In 1982, he moved to the capital, entered the Faculty of Economics of Enterprise of the Prague University of Economics. After graduating from university in 1986, Kellner began to work in the state corporation referent & laquo; Stroyimport ". Deliveries of imported equipment - a good scope to make a career in a socialist country. However, by the end of the 1980s, the world began to change. Attempts to reform the Council for Mutual Economic Assistance (CMEA), with the aim of turning it into a "common market" of the Union of the USSR states have failed. In 1989, Kellner resigned from "Stroyimporta".

Finding himself

During the year, the Czech Kellner worked as an assistant producer at the studio Premysl Prague Barrandov, the oldest and largest in the country. "Peter was an unusually conscientious executive and was able to quickly navigate through life. He was able to immediately isolate the most important thing, "- later recalled Premysl Prague. In a short period of work in the studio of the future billionaire even managed to play a cameo in the movie decadent "servants of Time", the directorial debut of renowned screenwriter Irena Pavlaskova.

there was a "velvet revolution" in November-December 1989 in Czechoslovakia. Power passed to the Democrats, led by Vaclav Havel. The planned economic liberalization underminingzumevala including the privatization of state assets. Since the Barrandov film studio owned by the Government, for its privatization could mean more deprivation and government funding. Already in 1990, Kellner left the studio to try his hand in the emerging field of free enterprise. He joined the company just created Impromat, which is engaged in import and sales of copiers Japanese company Ricoh. Impromat company exists to this day and is now not only sells office equipment, and air conditioning, as the official distributor of Fujitsu in the Czech Republic. It was while working on Impromat Kellner met his future business partner Milan Winkler.

Winkler is engaged in delivery of computer components from Asia and sells them to legal entities in his home town of Teplice in northwest Bohemia. In 1990, he moved to Prague, where he began to work together with Kellner. As later recalled Winkler, they were able to found out about the Ministry of Finance of Czechoslovakia preparing a bill on large-scale privatization. "We have decided to organize an investment fund. We CPADhu was clear that the only way to take part in large-scale distribution of wealth: in the voucher privatization ", - said Winkler.

Vouchers in Czech

Privatization in Czechoslovakia became a shining example of the voucher privatization, which a year later would be tried in Russia. By the time of the "Velvet Revolution" of Czechoslovakia had the most powerful state sector of the economy of the countries of Eastern Europe: in 1988, 97% of industrial production falls on the state corporation.

Those who came to power in December 1989, President Vaclav Havel and Prime Minister Marian Chalfie sought a transformation of the country towards capitalism, more can be done. In May 1990 the government approved a plan for radical economic reforms and initiated the development of the privatization program. It is at this stage about the plans of the authorities found out Kellner and Winkler.

In February 1991, it entered into force on the first law, which creates a legal framework for privatization. By the end of the year it was made more than ten clarifying regulations, and then to February 1992 launched the "first wave & raquo; privatization, which lasted one year. Considered a priority voucher (voucher) privatization method in which the citizens themselves redeemed nominal book with multiple checks totaling 1 thousand. CZK, which may invest in shares of companies either alone or through the mediation of investment funds.

Spent the fall of 1991 survey showed that less than 25% of families are definitely going to buy out their checkbooks, and half of them do not even know what to do with these vouchers. As a result, about 72% of the citizens of coupons received "first wave" of privatization was transferred to the investment funds management.

Credit for PR

Immediately after the entry into force of the first law on the privatization of Kellner and Winkler, wasted no time in February 1991, registered in the WIKA Teplice company, for which later received the license for the creation of an investment fund. In September they organized the first privatization fund, abbreviated to the PPF, to prepare for privatization.

The authorized capital of the fund was relatively small - 100 thousand Czechoslovak crowns, which corresponded in 1991.approximately $ 3.6 thousand., or about $ 6.3 thousand. in current prices. However, a start-up capital was not enough to start a campaign to raise funds of citizens. Across the country, in the "first wave" of privatization involved 434 investment fund, PPF and required a large-scale advertising campaign, to win the trust of the Czechs (in spite of the fact that the country has not collapsed, Slovakia PPF offices did not open).

Finding investors Winkler has agreed with the leadership of the state glass factory Sklo Union Teplice hometown of investing 20 million kroner in the form of debt financing and capital increase. Instead, the head of the Sklo Union Stepan Popovic joined the PPF Board of Directors and became a minority shareholder in the fund (later sold his share of Kellner).

Since the beginning of the privatization campaign PPF launched an aggressive advertising campaign, including TV and radio. The face of the campaign made popular then the actor Josef Dvorak. As a result, PPF has collected 1.4% of all vouchers in the country and ranked 11th in terms of capitalization. After the dissolution of Czechoslovakia in 1993 passed the "second wave" of privatization, where PPF udaaxis has to get 2.1% of checks. After that, the fund management were shares in 202 companies worth 4.9 billion kroons.

A few years after the successful launch of PPF fund between business partners began serious friction. As a management company WIKA regularly organized dovypuska shares to finance the activities of subsidiaries. Kellner Winkler accused of trying to "dilute" its share and take possession of the business, but soon found himself convicted of forgery of bills.

According to one theory, Kellner really paid activities of the holding of the share Winkler (leaving his shares to himself or distributing the familiar), and then framed Winkler using counterfeit bills. According to another version, Kellner massively buying up its own shares, for fear of a raider seizure of the PPF, - in those years, scammers often gained control of the factories, buying stocks on the cheap fund manager. Whatever it was, by 1995, Kellner became the controlling owner of the PPF.

Petr Kellner in figures

$ 11.4 billion of wealth Kellner by September 2016

€ 21.6 billion - the costktivov PPF at the end of 2015

€ 5.9 billion - a gain PPF in 2015

1.4% of vouchers "first wave" of privatization acquired Kellner Fund

434 Fund participated in the privatization in Czechoslovakia in 1992

The company invested 202 PPF in the early 1990s

At 25 times could grow investor capital in PPF on the results of privatization

Sources: Forbes, iDnes, Ceska pozice, company data

Insurance Baron

Consolidation of assets in their hands helped Kellner first really big deal in my career. In the same 1995 PPF gathered to buy out 20% of the country's largest Czech insurance company (EIC). EIC core business was not bad, but it belonged to the banks brought only losses that affected the financial condition of the group. At the meeting of old and new shareholders of the Ministry of Finance with the mediation the parties have agreed that the FSC passes under the control of PPF fund, which also receives an option to increase its stake.

The transaction took place in June 1996. If at the end of the year still showed a solid FSC loss of 5 billion kroons in 1997, when he was already in private ruah, the group showed a profit of just under 500 million kroons. By 2001, through the implementation of options and buying foreign shares Kellner PPF brought share owned EIC up to 93%.

The success of the transaction predestined businessman interest in financial markets - banks and insurance companies. For example, in 2007, he reached an agreement with the Italian insurance giant Generali on the joint conduct of insurance business in Eastern Europe. The new joint venture PPF Holding has a 49% stake, the very same Kellner entered the Generali board of directors and the corporation acquired a minority package. By 2015, the partnership with Generali has been discontinued.

An important market was and remains Russia for Kellner. Here it first came out back in 1993 to take part in the Russian voucher privatization. By 1997, he had no explanation rid of all Russian assets. Subsequently, the journalists explained the move to natural instinct billionaire who could guess about the future of the Russian government defaulted.

A few years later Kellner returned to Russia by organizing the country's network of Home Credit consumer lending banks. Just as soon as the young bank began to cooperate with theetyu stores "Eldorado" household equipment retailer customers could, for example, participate in numerous preferential shares of the bank for a loan. During the 2008 financial crisis, when the government presented to the "Eldorado" multibillion-dollar tax claims, is the owner of the PPF as the union of the bank loan granted retailer in exchange for a stake in the business. Subsequently, the Czech fund ownership has brought "El Dorado" of up to 100%.

Less successful for Kellner story took place in the Russian insurance market. In 2007, he bought a businessman Alexander Mamut minority stake in the 38.5% of shares of "Ingosstrakh" insurer, which then occupied the first place in Russia on charges of insurance premiums. The remaining majority stake in the hands of "Basic Element" Oleg Deripaska.

Plans to start an additional issue of the insurer for the capital increase Kellner perceived as an attempt to "dilute" its share, and tried in every way to sue the company. In 2012, he even managed to reverse the decision of the shareholders of "Ingosstrakh" the appointment of the Board of Directors, but after just a few monthsPPF and Generali started the process of divorce, their assets, according to the agreement, the share of "Ingosstrakh" departed Italians. This step Kellner freed themselves from years of headaches and become open to new projects: for example, in 2013, PPF bought a Czech branch of mobile operator O2 and became interested in real estate: in the Czech Republic and in Russia.

Despite the possible sale of "El Dorado", Kellner recently claims that is not going to leave the second time in the Russian market. Last summer, after the collapse of the currency market and the imposition of sanctions, he insisted: "We know that the economic crisis in Russia there is no short-term solutions. But the PPF in Russia for the long haul, and we will continue to invest in this country in the future. We do not run away from problems, we turn to them and use as an opportunity. "

Kellner has not changed position in the current year, despite the fact that Asia for the first time in a long time has overtaken Russia as the largest market for PPF. "We are confident that the profitability in the Russian market will soon rise again," - said Kellner in the report for 2015.