CZECH LOTTERY GOES BUST

Posted 3/28/11 : Sazka has filed for insolvency
 
News from Prague breaking over the weekend is that the Czech lottery firm Sazka has filed for insolvency under pressure from creditors
 
The company notified interested parties of its situation in a public statement promising that further information would be released Sunday.
 
Chief executive Ales Husak had earlier revealed that the firm, which has been dilatory with payments to a range of creditors including bondholders, would likely seek reorganisation to avoid being wound down.
 
Sazka is owned by Czech sports unions. The Reuters news agency reported that a Prague court had already appointed a preliminary receiver and creditor committee for the firm earlier on Friday, pending a decision on previous insolvency claims by creditors.
 
Sazka had 10.5 billion crowns ($606 million) in debt as of September 2010, the majority of that amount in bonds. The company had delayed part of a payment on its 2021 amortising bond in January and lost its rating from Standard and Poor, but made the payment later.
 
The Czech Finance Ministry, which regulates the gaming industry, has been investigating Sazka after it failed to pay lottery prizes on time earlier this (March) month. Sazka said it had resumed making payments, and revealed that private equity group PPF, owned by billionaire Petr Kellner,
took over part of claims earlier this week.
 
Reuters reports that Sazka incurred deep debt after building a 17,000-seat arena for the 2004 ice hockey World Championship.