Thursday, 17 January 2019

LN: Chinese investors interested in Karlovy Vary

ČTK |
27 November 2015

Chinese investors are interested in luxurious real estate in the Karlovy Vary spa town, west Bohemia, in particular in the iconic Pupp Hotel, daily Lidové noviny (LN) reported yesterday.

Prague, Nov 26 (CTK) - Chinese investors are interested in luxurious real estate in the Karlovy Vary spa town, west Bohemia, in particular in the iconic Pupp Hotel, daily Lidove noviny (LN) writes yesterday.
This would be another big investment of the CEFC Chinese company in the Czech Republic where it has bought palaces in the centre of Prague, listed as protected heritage sights, worth billions of crowns as well as several villas in prestigious Prague localities.
Now the Chinese would like to gain a majority stake in Pupp, which is quite a logical step since the CEFC is indirectly linked to the Karlovy Vary International Festival and the hotel is one of its main venues. All major festival guests are accommodated and parties and some screenings are held there.
Moreover, the number of Chinese tourists visiting Karlovy Vary has been rising year-by-year, LN writes.
"CEFC is definitely interested in Pupp, but the negotiations are very complicated in this case," a source close to Jaroslav Tvrdik, president of the Mixed Czech-Chinese Chamber and former defence minister, who represents the Chinese investors in the Czech Republic, told LN.
Hundreds of minority shareholders of Pupp could cause trouble to the Chinese and mar the transaction eventually, LN writes.
One of them told LN that the main shareholder would probably like to sell the stake to anyone.
"Tvrdik and the chief Chinese from CEFC [company president Chan Chaoduo] stayed in Karlovy Vary for two days and they spent one night in Pupp... A tour of the hotel was part of the stay," the shareholder who who requested anonymity said.
The hotel did not deny the Chinese interest. However, it was no special tour of the hotel, but a regular meeting of the Mixed Czech-Chinese Chamber that meets in Karlovy Vary about four times a year, Pupp media representative Marek Prazak said.
LN also writes that Pupp´s majority shareholder changed quietly this year and the new representative did not appear at the shareholders´ meeting. This is why it is not apparent with whom the Chinese are negotiating.
"The current majority shareholder is doing the utmost to gain 90 percent of the stake, probably to squeeze out minority shareholders. But they still need about 15 percent," a majority shareholder told LN.
It adds that CEFC would probably hesitate to invest in real estate with a bunch of resisting shareholders.
LN also writes that CEFC is already connected with Karlovy Vary thanks to the previous purchases. It is a co-owner of the Lobkowicz Breweries, which is the main partner of the Karlovy Vary film festival.
More investments of Chinese firms in the Czech Republic are expected.
"CEFC is just the beginning of the effort to turn Prague into China´s financial and technological centre for Central and Eastern Europe," Tvrdik said some time ago.
LN writes that Prime Minister Bohuslav Sobotka is now strengthening bilateral Czech-Chinese relations during his one-week visit to China. After the talks with him, the Chine Eastern airlines confirmed to launch flights from Shanghai to Prague, a second direct air connection between both countries after the Beijing-Prague flights operating since September.
This is an important piece of news for Karlovy Vary, too, as the town more and more focuses on Chinese clients to replace the weakening flow of the previously dominant Russian tourists.
In the second quarter of this year, the number of Chinese visiting Karlovy Vary increased by 24 percent year-on-year. However, unlike the Russians, the Chinese use mainly hotel services, while they do not seek spa treatment so much, LN writes.
($1=25.527 crowns)

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