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Chinese-backed firm Travel Service to take over Czech Airlines

10/07/2017| 7:21:34 PM|

Travel Service, partly-owned by Chinese investment group CEFC and already owner of 34% of Czech Airlines (CSA), said it had agreed to buy both the state's 19.7% stake and Korean Air's 44% holding.

Chinese-backed Czech airline operator Travel Service is set to take over national carrier Czech Airlines (CSA) with a deal to buy out Korean Airand possibly the government's stake, it said on Friday.

Travel Service, partly-owned by Chinese investment group CEFC and already owner of 34% of CSA, said it had agreed to buy both the state's 19.7% stake and Korean Air's 44% holding, confirming a report by news website zdopravy.cz.

CEFC holds 49.9% of Travel Service, a charter and low-cost airline operator under the Smartwings brand. Founder Jiri Simane and business partners control the rest.

The Czech finance ministry had said earlier that no decision on a deal for its shares had been taken.

"This (acquisition) step is in line with fulfilling a long-term strategy to become a strong European airline operator," Travel Service said in a statement.

CEFC, which said last month it would buy a $9.1 billion stake in Russia's Rosneft Oil, bought a stake in Travel Service in 2015 while making a series of other acquisitions in sport, brewing and real estate in the Czech Republic in 2015.

Korean Air acquired its 44% stake in CSA in 2013 from the state after the government had made several attempts to sell the airline, which had been loss-making at the time.

Travel Service also bought into CSA in 2013, taking a 34% stake that the state had made available in an option for Korean Air, which passed it on to the Czech group.

In 2016 CSA posted a 241 million crown ($10.93 million) profit and handled 2.7 million passengers.

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TAGS: Travel Service | Czech Airlines | CEFC
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