May 9, 2018 / 6:11 PM / in a year

UPDATE 1-China's CITIC to pay CEFC Europe's 450 mln euro debt - CEFC official

(adds J&T statement)

PRAGUE, May 9 (Reuters) - State-run Chinese conglomerate CITIC Group will repay around 450 million euros owed by the European arm of embattled investment group CEFC China Energy to Czech finance and banking group J&T within days, a CEFC official said.

CEFC China Energy has been under pressure following reports that Chairman Ye Jianming had been investigated for suspected economic crimes earlier this year in China.

CITIC has formed a joint-venture with CEFC unit CEFC Shanghai in which CITIC holds 49 percent, CEFC Europe Deputy Chairman Jaroslav Tvrdik said. The joint venture now owns CEFC Europe, previously fully-owned unit of the CEFC group, he said.

“The CITIC chairman sent a binding bank guarantee yesterday (Tuesday) to our main financing institution, J&T, ... expressing readiness to pay back the debt... of around 450 million euros,” Tvrdik said in a video interview with Seznam Zpravy news website published on Wednesday.

“Therefore I assume that the company will be without debt within days and we will stop talking about crisis,” he said.

CEFC also holds a 9.9 percent stake in J&T Finance Group.

Earlier plans to raise CEFC’s ownership of J&T Finance Group to 50 percent have been shelved as CEFC came under strain.

A J&T spokesman confirmed it had received the letter, but disputed the information on the guarantee.

“The information on the bank guarantee is not true, however, a non-disclosure agreement does not allow us to provide more information,” Petr Malek from J&T Private Investments (JTPI) said in an emailed statement.

He also said that any change of the CEFC Europe shareholder structure could not be done without JTPI’s knowledge.

The office of the Czech president Milos Zeman had earlier said that a memorandum of understanding was signed on the CITIC-CEFC joint-venture.

Tvrdik said CEFC Europe management was instructed to prepare plans for development of the company’s Czech assets which include stakes in airline Travel Service, a top flight football team, brewery group Lobkowicz and hotels in downtown Prague.

Zeman is pursuing closer economic ties with China, and CEFC has been a top Chinese investor in the central European country. (Reporting by Robert Muller Editing by Alexander Smith)

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