By Jason Hovet
PRAGUE (Reuters) – Czech billionaire Daniel Kretinsky, who forged one of Europe’s largest energy groups through more than a decade of deals, is diversifying and scouring retail, media and other areas for investments.
Kretinsky helped launch Energeticky a Prumyslovy Holding (EPH) in 2009 with Czech-Slovak financial group J&T and PPF – owned by the richest Czech Petr Kellner – and forged the business into an energy powerhouse with assets stretching from Ireland to Italy.
EPH has grown by squeezing profits out of unwanted coal plants and also has a key stake in Slovakia’s Eustream, an important carrier of Russian gas to Europe. But Kretinsky told Reuters that tougher competition for energy deals has spurred him to new targets in the past couple of years, including a stake in German retailer Metro , although energy remained core to his business.
Answering questions via email due to self-isolation after contracting the coronavirus, the former investment bank lawyer said competition from pension and infrastructure funds, fewer deals in generation and increased risk due to volatile CO2 prices have hurt growth opportunities in the energy sector.
“Energy will remain a key pillar of our operations and we will indeed explore ways how to grow our presence there. However we are less optimistic in our capability to do so,” Kretinsky said in reply to Reuters questions.
“For the diversification strategy I think the existing investments are signalling our way but give us a few weeks to make a more structured announcement.”
Kretinsky, who owns a 10% stake in ProSiebenSat.1 Media , dismissed speculation that he would team up with Italy’s Mediaset to make a bid for the German broadcaster.
“We are not acting in concert with Mediaset,” Kretinsky said.
Kretinsky is the main shareholder in EPH, which generated 1.9 billion euros ($2.05 billion) in consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) in 2018, the latest published data.
Kretinsky, whose net worth stands at $3.4 billion according to Forbes, said equity allocation in recent years has been split between renewables and gas power and that future investment would be more about development than acquisition, with some minor divestments possible.
NEW DEALS
When asked about outside investors, Kretinsky said the group had considered inviting one more “in a very minority way” into its EP Infrastructure unit – in which Macquarie already has a stake.
“Very likely we will postpone the decision as we are considering some other steps which are not supporting this transaction now,” he said, without giving further details.
Kretinsky branched out beyond energy with J&T chief Patrik Tkac in 2018 with a share of German wholesaler Metro that has grown to just below 30%. They also hold a stake in French retailer Casino .
Kretinsky, who also bought a minority share in French paper Le Monde and other French titles in recent years, said he expected the coronavirus outbreak would eventually impact his retail and media investments in some way.
The billionaire, who said he had mild symptoms, has argued some statistics have overstated the threat of the virus. But he added any death was tragic and states’ measures to fight the spread have been right, buying time for healthcare systems.
He predicted the impact of lockdowns could be limited in places where governments get intervention and economic aid right but said a second threat from the virus was behavioural change.
“If (people) fear and adjust their consumer and economical behaviour, we will see robust negative impacts and deep structural changes. Unfortunately the misinterpretation of the numbers and related panic are working heavily against us,” he said.
(Reporting by Jason Hovet; Editing by Michael Kahn and Susan Fenton)
