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Tatra: its creditors want to become stakesholders

Published : 10 April 2013
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On last 5 April, the Office for defense of Economic Competition (UOHS), the Czech antitrust institution, began to examine the request of two Tatra’s creditors to become stakesholders of the truck company.

Those two creditors are far from being unknown. We are talking about Jaroslav Strnad, owner of the armament company “Excalibur Army” and “Promet Tools”, a tool producer subsidiary of “Promet Group”, who are both linked with “Composite Com”, the company who induced the judicial auction of Tatra in last March.

According to Andrej Čírtek, “Composite Com” spokesman, the acquisition of stakes of Tatra’s creditor will be in accordance with the amount of debts which were not paid after the auction. He added that this process will be concluded only after the consent of UOHS that should occur within one month.

An acquisition of stakes which is logical but doesn’t look as a mere coincidence

This acquisition of stakes by two of the main creditors of Tatra is not a surprise. It was obvious that the 176 million Czech crowns would not be sufficient to cover the company’s debts.

Taking a shareholding is however a bet for the future by creditors who are hoping to get their money back either thanks to expected benefits or by selling Tatra’s assets. If UOHS will agree with this new repartition of the stakeholders, “Excalibur Army” and “Promet Tools” will have easily seized control over the truck producer. Effectively, it seems logical that with a 650 million crowns debt, the two creditors will want a big share of the company, if not a majority share.

Reviewing the transfer of ownership of Tatra, it becomes more and more difficult to believe that it is not an operation organized by the two creditors in order to take control over Tatra. The question mark is more about the support of the former CEO Ronald Adams who could stay in the company even with the new owners. Let’s put the data together:

  • Years 2011-2012: Company “Composite Com” buys Tatra’s debts mainly from banks,
  • End of December 2012: Tatra went bankrupt;
  • End of January 2013: a judicial auction is planned under the impulsion of “Composite Com” and “Development Agency s.r.o.”;
  • 8th March 2013: Marek Galvas creates company “Truck Development s.r.o.”,
  • 15th March 2013: “Truck Development s.r.o.”, the only bidder, wins the auction and buys Tatra for 176 million crowns;
  • 18th March 2013: Marek Galvas is in Kopřivnice in order to start the transfer of ownership. Andrej Čírtek, « Composite Com » spokesperson, declares to the medias: “Composite Com is negotiating in order to recover its claims and not in order to acquire Tatra’s stakes”;
  • 5th April 2013: Jaroslav Strnad and company “Promet Tools”, both close to “Composite Com”, address a request to Office for protection of Economic Competition in order to get stakes in Tatra and “get the opportunity to control jointly company "TATRA TRUCKS a.s.”

A future that is always blurred

The answer from UOHS is awaited in May.

For the moment, the orientations, I mentioned in my last article about Tatra, are still valid. The first declarations of new owner Marek Galvas confirm the will to go on with the truck production. However, people know the volatility of such declaration. Facts always allow U-turns in such promises without any problem.

Tatra dismembering is always an option that has to be considered because the two creditors who want to get stakes from the truck company might find some interest in taking possession of assets: Jaroslav Strnad and his company “Excalibur Army” would obviously be able to find some use of Tatra’s patents and production lines when “Promet Tools” could employ smelting plant and spare parts workshops.

We will thus wait for the UOHS opinion with great interest and will follow with attention the future decisions of the new masters of Tatra Trucks.