Sazka circus to truly begin when Vítek files for insolvency

Martin Ulčák says he may ally with coal baron František Štěpánek and industrialist Jan Světlík to save the troubled betting firm

István Léko | 17.01.2011
Aleš Hušák and a remarkable number of Czech financiers can expect a few exciting months, as the fight for Sazka will not be over so soon

Not even the controversial Czech mega eco-tender has tempted as many financial heavyweights as has the fight for control of the troubled betting and lottery company Sazka.

While it is just a few giants such as Petr Kellner, Richard Háva and Martin Roman fighting over the eco-tender, the battle field for Sazka has been joined by a multitude of billionaires. Here they are in alphabetical order: Marek Dospiva from Penta; the oil magnate Karel Komárek Jr.; the industrialist Jan Světlík; the coal baron František Štěpánek from Sokolov; the banker Patrik Tkáč from J&T (who apparently has a certain agreement with PPF); Martin Ulčák; Ivo Valenta from Synot (Sazka’s rival); and the developer Radovan Vítek.

For those not in the know it is necessary to explain that Vítek is a loner, officially Penta is also in it alone (if a deal hasn’t been arranged with Vítek from the start), Synot is with Komárek and Ulčák is with Štěpánek and last but not least Světlík is with Aleš Hušák.

The Hušák–Ulčák–Štěpánek–Světlík confederation deserves a special mention; Ulčák, who together with Hušák is trying to save Sazka from a hostile take over, has two indubitably solvent financial partners. The coal baron František Štěpánek, the boss of Sokolovská uhelná, and the industrialist Jan Světlík. “They are both traditional allies of mine and I’m in daily contact with them. If needs be they’ll help, but this hasn’t been broached yet,” Ulčák told Czech Position. What are these titans after? Sazka isn’t a state cash cow that can be permanently milked in myriad ways.

So what are these titans after? Sazka isn’t a state cash cow that can be permanently milked in various sophisticated ways. But if we look at the majority of those who control Sazka on paper (mainly bosses of the sporting associations and regional sports bigwigs) , then we can’t keep the illusion that they will be able to withstand the marauders’ intellectual and financial superiority.

If we look at the battle for Sazka through the prism of recent events, it is clear that for some of the raiders it’s not about the future of sport but merely squeezing the betting and lottery company. In comparison, everything that Hušák has so far shown with Sazka will look like a frank attempt by a megalomaniacal zealot to boost the company — and himself — at any price. From the standpoint of liquidity, Sazka has hit rock bottom and next week its creditor, Radovan Vítek, will definitely file for insolvency proceedings, a new chapter in the firm’s history will be opened. The next 60 days will depend on how the judge will act.

Vítek the Cypriot vagrant

Everything that is currently going on around Sazka is neither important nor interesting. At the moment it doesn’t matter what Hušák states, what one billionaire says to another, what lawyers, the officials of sporting associations or politicians expound. The slaughter begins this week when the main butcher, Radovan Vítek — as he has promised — will file for insolvency at the courts.

Sazka boss Hušák has already warned Vítek that the firm isn’t bankrupt and that whoever attempts to plunge it into insolvency can expect a legal battle. “We will fight back against any bullying petitions. In the event of this petition the Cypriot vagrant must be aware of what he is doing,” Hušák said at a Jan. 14 press conference. He was speaking to Vítek, whose companies are based in Cyprus. Sazka’s lawyers can appeal against the court’s decision, so a relatively long process is expected.

Hušák and Ulčák, meanwhile, will try and convince Sazka’s shareholders (but chiefly the gambling public) that a petition for insolvency doesn’t automatically mean that the firm is bankrupt. If Vítek is counting on the associations handing him the symbolic keys to Sazka as soon as he submits the petition and then thanking him, he is mistaken. Moreover, Sazka’s lawyers can appeal against the court’s decision, so a relatively long process is expected.

Sazka’s arena now makes a profit, but the company is hugely indebted

Without doubt, it will be accompanied by some juicy background information, which is already spreading in Prague’s financial wings. It has been said for some time that there is hardly any judge in Prague with whom Vítek cannot come to an arrangement.  There is also speculation that for Vítek, an old hand in many bankruptcies, it will be no problem to install an insolvency administrator who will go hand in hand with him.

Vítek is interested in several of Sazka’s real estate projects (land and viticulture); apparently he doesn’t want the arena or the main office. Purportedly he acts in agreement with Penta but is inscrutable. He sometimes behaves as though he couldn’t care less, muddying the waters and raising tension. And he enjoys it! Some unbelievable tales are circulating in Prague. For instance, his way of communicating with Hušák. Apparently, when Vítek tried to call him, the head of Sazka didn’t pick up the phone. Now the opposite is true: Hušák calls Vítek three times a day, and on the third try Vítek pickus up and says, “Not now, in half an hour” and hangs up. He’s simply having fun.

Billionaire Kellner’s ego could prompt a PPF bailout of Sazka

In any event, the main battle of nerves will start with the petition for insolvency. The first to crack loses. Ulčák described the situation to Czech Position: “We’re a third of the way there. It started in December and we could have it on track by the end of March.” Theoretically, it could work out for Hušák and Ulčák — to get the money together that is so acutely needed for paying the debts that Radovan Vítek holds. The boss of Sazka might not have the money, but if Ulčák — as he told Czech Position — manages to find the necessary billions, thanks to his long-term partners Štěpánek and Světlík, Sazka could hold its head above water. Except that Štěpánek and Světlík have yet to give him even Kč 1 billion.

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