Czech firm PPF aims to exit China, wants partners for Europe acquisitions

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 acquisitions on Europe, Chief Executive Jiri Smejc said.

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

"We are 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 without that, it is impossible to operate in China under current conditions," Smejc told reporters.

He said 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 303 million euros last year and 584 million in 2020.

PPF wanted to develop Home Credit in India, Vietnam, Indonesia and Philippines but needs partners with banking licences to secure access to cheap funding from deposits, which were more stable than markets, Smejc said.

He said the company was in talks without naming parties.

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

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

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 reiterated that the firm would completely exit Russia.

($1 = 0.9529 euros)

(This story correctes to add dropped words "without that", paragraph 3)

(Reporting by Jan Lopatka; Editing by Edmund Blair)