Czech Republic

The Czech Finance Minister Miroslav Kalousek ordered a probe in the dominant Czech lottery firm Sazka after it failed to pay out a record jackpot, Reuters reported on an idnes.cz story. The indebted national lottery operator is facing insolvency claims by two major creditors who, along with another group of investors, are battling to take control over the firm. The investigation is expected to determine whether Sazka's lottery licence should be removed, the website said. Kalousek said it was preliminary to say whether Sazka would lose its licence, idnes.cz reported.

A major creditor filed an insolvency claim against the dominant Czech lottery firm Sazka, the second such move against the indebted company over the past two months, a spokesman said on Friday, Reuters reported. Privately-held KKCG Structured Finance, which holds debt past maturity worth 410 million crowns ($23.59 million) and some of the company's bonds, filed the claim with Prague City Court on Friday, KKCG spokesman Daniel Plovajko said.

Czech lottery company Sazka has received takeover offers from two investors, the latest development in a battle for control of the indebted firm, Reuters reported. Investment group KKCG on Monday made a direct offer to shareholders for a 2.8 billion crown ($156.8 million) capital hike in Sazka in exchange for a 67 percent stake. KKCG said its offer would guarantee 250 million crowns annually for 15 years to sports unions which own Sazka.

Sazka AS, the Czech Republic's struggling state-owned lottery company, Monday said it has teamed up with two domestic financial firms to repay overdue principal on its euro-denominated bonds and stave off bankruptcy. "Sazka [can now] provide the financial means necessary to prevent the company from moving into insolvency," said Martin Ulcak, owner of E-Invest, a privately-held Czech financial company that is one of the two firms partnering with Sazka. Most of the capital will come from Penta Investments, a Slovak-Czech private equity firm.

Czech lottery firm Sazka AS became the first global issuer to default this year as the result of a missed principal payment, according ratings agency Standard & Poor's, Dow Jones Daily Bankruptcy Review reported. By this time last year, 11 global issuers had defaulted, including nine in the U.S., one in Australia and one in Canada. Sazka missed a principal payment, which, when counted with missed interest payments, ranked among the top reasons for default last year. In all, 28 issuers cited those missed payments as the reason for their default.

Czech lottery firm Sazka AS has asked its bondholders to agree to a 30% to 33% reduction in principal on outstanding bonds and to lowering the yield on the bonds to 6% from 9% to enable the company to continue operating and not move into bankruptcy, newspaper Hospodarske Noviny reported. Sazka hasn't disclosed the names of the bondholders, who together hold EUR215 million worth of bonds, the paper reported. Local financial institutions have declined to comment on the topic.

A major creditor filed on Monday an insolvency claim against the dominant Czech lottery firm Sazka, a court said, raising the stakes in a battle for control of the indebted firm, Reuters reported. A company controlled by real estate investor Radovan Vitek filed the claim with Prague City Court after he said Sazka failed to make timely payment on 820 million crowns ($44.78 million) of its debt he had acquired from banks.

Cuts to the Czech fiscal budget are welcomed by investors, and rating agencies have raised the country’s outlook as the newly-elected government follows its promises of fiscal austerity with actions, The Wall Street Journal New Europe blog reported. But the country’s national police and firefighters oppose 10% cuts to pay and steeper cuts to expenditure for investment and operations, and on Wednesday they announced plans for mass demonstrations on September 21 in Prague.

The Czech government Monday decided to cancel the sale of flag carrier CSA Czech Airlines to a Czech-Icelandic consortium, citing a range of concerns, and will instead continue restructuring the company, Dow Jones reported. The airline's pilots last week agreed to a 30% pay cut in return for the resignation of carrier's management team. The airline's new boss is the head of the Prague airport.

One of the first fallouts, and certainly the largest, from the financial crisis in the Czech Republic came Sept. 22, 2008, when glassmaking group Bohemia Crystalex and Porcela Plus entered bankruptcy proceedings. One year later, Crystalex, one part of the group, has a new owner and - if full scale production resumes - could become the first example of an unlikely survivor of the crisis, The Prague Post reported. Crystalex's resurrection depends mostly on the company's ability to reacquire orders with customers who may now be skeptical about reinvesting in a cracked corporation.