Czech Republic

Czech Prime Minister Andrej Babis denied any wrongdoing on Sunday in connection with an international investigative report that listed him among current and former world politicians and businessmen that it says have used offshore financial structures, Reuters reported. The Pandora Papers report, by the International Consortium of Investigative Journalists, said Babis moved $22 million through offshore companies to buy an estate on the French Riviera in 2009 while keeping his ownership secret. The report did not say the transactions broke the law.
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The Czech central bank pledged to keep raising borrowing costs after lifting interest rates by the most in nearly a quarter century, pushing the koruna higher and angering the government with the European Union’s most aggressive anti-inflationary campaign, Bloomberg News reported. Policy makers increased the benchmark rate by 75 basis points to 1.5% on Thursday, exceeding expectations for a half-point increase.
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The Czech Republic’s central bank has increased its key interest rate by a quarter-point to 0.75% to tackle inflation amid the economy’s rebound from the coronavirus pandemic, the Associated Press reported. It was the second such increase in about two months. Analysts had predicted Thursday’s move, and a member of the bank’s board had indicated that the rate might be hiked further later in the year as the bank considers high inflation as a major threat.
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The government leaders of Poland and the neighboring Czech Republic held intensive talks Tuesday in an attempt to solve a years-long dispute that resurfaced recently over a Polish coal mine, the Associated Press reported. The Czech government says the brown coal Turow mine, located in southwestern Poland, near the Czech and German borders, is draining groundwater from communities and causing other environmental harm to Czech citizens.
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Bond investors bracing for Czech rate hikes are finding a silver lining in the latest bond selloff, Bloomberg News reported. Primary dealers bid for more than 30 billion koruna ($1.37 billion) of Czech government bonds due in 2030 at an auction on Wednesday, the highest demand for a note with about 10 years in maturity since May. The rush reflects the juicy yield premium that the battered securities now offer over equivalent German bunds.

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Czech Airlines’ insolvency petition sets out the scale of the company’s financial problems, which it partly attributes to the inability to source rescue funding from the Czech government, FlightGlobal reported. The company has 266 creditors, with the total liability to suppliers amounting to Kc809 million ($37.1 million) as of 25 February, its petition to a Prague municipal court states. But the petition, seen by FlightGlobal, adds that there is a debt of nearly Kc1 billion to “hundreds of thousands” of passengers who are owed for the cancellation of flights.

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Czech Airlines (CSA), part of the Czech airline group Smartwings, has filed in a Prague court for a reorganisation under solvency law as it grapples with a calamitous drop in revenue during the COVID-19 pandemic, Reuters reported. The airline sector has been among the worst hit by the pandemic and CSA, one of the world's oldest airlines, said its revenue last year dropped to a fifth of the previous year's total and led to a loss of 1.57 billion crowns ($72.7 million).
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A lack of tourists in the Czech capital forced City Sightseeing Prague to file for insolvency, Prague Morning reported. City Sightseeing is one of the world’s leading open-top bus, boat, and guided walking tour company. Established in 1999, the global brand provides hop-on hop-off services. City Sightseeing operates in over 100 locations across 5 continents which includes cities such as London, Rome, New York, Edinburgh, Seville, Moscow, Cape Town, and Prague.

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Blažek, famous Czech brand for menswear, has filed for insolvency, PragueMorning.cz reported. The company registers more than 150 creditors for a total debt of almost 87 million CZK. As iHNED.cz reports, the company’s founder is considering the entry of a new investor. The company became insolvent from the forced closure of stores during the first and second waves of the epidemic. Like many retailers, Blažek was already struggling with the shift to online shopping even before the pandemic struck this spring.

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Insolvency and restructuring activity remained low across Central and Eastern Europe (CEE), since the beginning of the pandemic, except Romania, which has recorded an increase in the number of insolvencies, and Czech Republic, which saw an increasing trend in restructuring, according to PwC ”Global Restructuring Trends” report, Business Review reported…According to the report, insolvencies are expected to increase in Q4 2020 and into 2021 globally, especially for those companies that operate in heavily COVID-19-affected industries that may take much longer to recover, such as leisure, trave

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