Mar 20, 2013 6:06pm by Jan Cienski
Tatra, an iconic Czech lorry maker, has changed hands at a fire sale price, marking the end of the Czech adventure of Ronald Adams, a US businessman who made his fortune selling Americans clunky graduation rings and went on to try, but fail, to rescue Tatra.
The company, based in the industrial east of the country, was sold last week for Kc176m ($8.9m), far below the $27m that Adams and other investors paid for it in 2006.
The company was auctioned off to the single buyer who put in a bid – a Czech firm called Truck Development – after a local court found that Tatra was insolvent and had to be sold to repay its $90m in debts. The debts are greater than Tatra’s value, estimated at about $80m.
Central European Rally, 2008
Marek Galvas, chairman of Truck Development, a company apparently founded this month, told Czech news agency CTK: “We don’t expect any workforce cuts and want to maintain the current production capacity. We want to stabilise the company as soon as possible and get on with all customers, suppliers and employees whom we don’t want to fire. The company will continue to operate and fulfil all its obligations. We have prepared financing through loans in the order of hundreds of millions of crowns for this purpose.”
Tatra started making cars in 1897 and in the 1920s began to make rugged trucks that continued to be produced in the communist era. The trucks can be found on Siberian oil fields and in the Czech military.
Ronald Adams
The company never properly recovered from the collapse of communism, which ended its preferential access to the Soviet empire. Adams had hoped to make it an international brand. Tatra already had a joint venture in India and Adams tried for civilian and military contracts elsewhere around the world.
But efforts to revive Tatra were dealt a severe blow by the economic crisis, which left hundreds of lorries clogging the factory’s parking lot and setting off a desperate attempt to drum up new sales, including to the Czech military. The army ended up buying 588 trucks for Kc2.5bn in 2008.
Stalin’s Tatra Cabriolet, 1949
However, that effort ended up torpedoing Adams, who was charged with corruption last year after prosecutors alleged that he had tried to offer a bribe to win a military contract. He denied any wrongdoing, although did admit to the Czech press that he had mentioned a figure of Kc20m to an arms merchant.
One of Adams’ accusers was Martin Bartak, a former Czech defence minister who resigned after himself being accused of seeking a bribe in a truck tender from Tatra, an accusation he called “monstrous and foul”.
Tatra’s Indian affiliate has also been in trouble over the sale of trucks to the Indian military, with the military alleging that bribes were paid to a lobbyist to facilitate the sale – an allegation the Indian company rejects.
http://blogs.ft.com/beyond-brics/2013/03/20/fresh-chance-for-tatra/#axzz2O7vS26Ub