Czech investment group PPF to focus on Europe

PRAGUE Reuters -- Czech investment group PPF, controlled by the wife of billionaire founder Petr Kellner, who died last year, aims to divest its once flagship consumer lending business in China and focus its acquisitions on Europe, Chief Executive Jiri Smejc said.

PPF, which posted 239 million euro 251 million profit last year and has assets of 42.2 billion euros, wants to find partners for its Home Credit consumer lending operations in southeast Asia to secure cheap and stable funding, he said.

"We're trying to find a strategic partner there in China who will gain majority, and following that will completely take over the firm, because we believe that under current conditions it is impossible to operate in China," Smejc told reporters.

He said that the group would see how this progressed in the next six months.

China used to be a key market for Home Credit, one of the world's leading consumer finance firms. It grew rapidly there in the last decade before being hit by the pandemic, tightening regulations and access to financing.

The Home Credit group lost 584 million euros last year and 303 million euros in 2020.

In India, Vietnam, Indonesia and Philippines, PPF wanted to develop Home Credit, but it needs partners with banking licences to get access to cheap funding from deposits that are more stable than markets, Smejc said.

He said the company was in talks without naming parties.

PPF, which invests in financial services, telecoms, media, mechanical engineering and biotech, is looking for private equity or family office partners to raise funds for acquisitions in Europe, Smejc said.

Smejc said that PPF wanted to expand more broadly outside the Balkans, where it is heavily invested, because they wanted the centre of gravity of our investments to be in Europe.

Smejc, a longtime business partner of Kellner who died in a heli-skiing accident, took over PPF this month in a deal that gave him stock options for 10% of PPF shares.

He stated that the firm would completely exit Russia.