Czech group Sev.en prepares for further major deals abroad

Czech businessman Pavel Tykač is betting heavily on coal, which most investors, including those abroad, are turning away from. His Sev.en Group has taken advantage of low valuations to buy coal-fired power plants and mines in the US, Australia and Vietnam, as well as gas-fired power plants in Britain. And the company is preparing for further, larger deals, Sev.en Global Investments CEO Alan Svoboda told Bloomberg today.

„We have many more deals in the pipeline than in the past, and we hope to grow even faster than before,“ Svoboda said.

„Every year we look at hundreds of opportunities and submit dozens of binding offers,“ he added.

Sev.en is seeking to protect its assets through expansion from the EU’s efforts to become a leader in moving away from fossil fuels. It is also betting that delays and problems in the transition to renewable energy will keep coal in the mix for many years, at least outside Europe. Over the past five years, the company has amassed assets abroad with an estimated value of three billion euros (75.8 billion Kč).

The EU’s efforts to phase out coal pose increased regulatory risks for companies such as Sev.en, Svoboda said. „We are losing much of our interest in Europe, with the exception of Britain. We are being drawn to America and Australia,“ he said.

Although the company continues to focus on developed countries with stable political systems, it is also expanding into communist-ruled Vietnam, where it has agreed to buy a 70% stake in a coal-fired power plant from American and Chinese investors. According to Svoboda, Sev.en hopes this investment could be followed by expansion into countries such as India, Indonesia and Malaysia. Many countries in the region have no intention of giving up coal in the foreseeable future, and their governments are often willing to provide foreign owners with long-term guarantees.

However, it is still easier to secure financing for green projects, which is one reason the group is also seeking to expand into sectors such as electricity storage and mineral extraction, including minerals used in batteries. In Australia, it is preparing to start producing potassium sulfate fertilizer using an environmentally friendly process.

In the past 18 months, Sev.en has opened offices in New York, London and Sydney as it seeks to expand its global presence. „We are looking at increasingly larger transactions,“ Svoboda said, adding that acquisitions priced at 500 million to one billion euros (12.6 billion to 25.3 billion Kč) are currently ideal.

Despite its growing interest in expansion, Sev.en remains selective, according to Svoboda. „Rather than having a broad portfolio of many smaller assets, our goal is to own a limited number of crown jewels that we can go all in on,“ he added.