Friday, May 27, 2011

Klein Constantia Sold

South African 1st growth Klein Constantia has been sold to American-Czech billionaire Zdenek Bakala and UK banker Charles Harman. “We are privileged to be custodians of one of the most historic properties in the Cape, and regard the preservation of this heritage as a serious responsibility.” said Bakala.

 The new owners are enthusiastic about the continued development of Klein Constantia as one of South Africa’s top wineries. Lowell Jooste will be staying on as managing director and Adam Mason as wine maker with no planned changes to the team or operations.

With the late Ross Gower as wine maker, the Jooste family re-created the legendary Vin de Constance -  recognised as one of the great wines of the 18th and 19th centuries - and went on to virtually own the natural sweet wine category in South Africa. They also became well known for world-class Sauvignon Blanc and Bordeaux blends and varieties.

According to Forbes, Bakala owns 30% stake in miner New World Resources. He also owns 11% of Ukrainian iron ore producer Ferrexpo after bailing out Ukrainian billionaire Kostyantin Zhevago, who faced a margin call in the fall of 2008; got stock at 28% discount to what stock had been trading at. Started out in finance in the 1990s: launched the Prague office of Credit Suisse First Boston in 1991 and three years later founded Patria Finance, one of the largest investment banking boutiques in the Czech Republic. Took control of coal company OKD in leveraged buyout in 2004; now part of NWR. "The forgotten old economy assets have given us a better return than sexy assets. We like tangibles." Dartmouth MBA grad started a foundation to give Czech students scholarships to study abroad.

KC Proprietary feeling
The duo are alleged to have paid around R160m for the feeling believed to include a substantial overdraft. But then Forbes etsimates his wealth at $1.2bn. Lets hope the only digging they do on the property is for a new cellar and vineyard plantings.

Update on Bakala via his PR:
Zdeněk Bakala is a Czech businessman and financier who co-founded BXR, a
diversified investment group with a global portfolio of assets valued at approximately
six billion dollars.

Born in Opava in the Silesian region of Czechoslovakia in 1961, but decided to
leave his communist-ruled homeland after being denied the chance to study at a
school of his choosing, and while on a trip to what was then Yugoslavia in 1980 he
crossed into Austria, sought asylum and thereafter made his way to America.

He graduated with a degree in economics from the University of California, Berkeley,
and then gained an MBA at the Amos Tuck School of Business Administration at
Dartmouth College, New Hampshire. In 1989 he took a job at the Drexel Burnham
Lambert investment bank in New York, and then moved to Bank of America.

In 1990 he joined Credit Suisse First Boston in London, where he was in charge of the
Czechoslovakia desk. In 1991 he returned to Czechoslovakia to open the Prague
office of CSFB, and was managing director of the bank’s operations in
Czechoslovakia and, after 1993, the Czech Republic.

In 1994 Mr. Bakala established Patria Finance, the Czech Republic’s first independent full-service investment bank, which in 2001 was acquired by the Belgian bank, KBC. Mr. Bakala remained Chief Executive Officer of Patria until early 2002 and served as its Chairman until May 2002.

As an investment banker with CSFB and Patria, Mr. Bakala played a key role in
Czechoslovakia’s privatization programme and the formation of a viable capital market during the country’s transition to an open, free market economy.

He advised the Czechoslovak government on the landmark strategic sale of Skoda Auto to Germany’s Volkswagen Group, he was an advisor during the privatization of SPT Telecom, the Czech Republic’s telecommunications provider, and later served on the board of its successor, Česky Telecom.

Mr. Bakala advised the Czech government on the creation of Česká rafinérská, a vehicle that grouped together the country’s oil refining assets ahead of investments from Conoco, Agip and Shell. He was actively engaged in the privatization and restructuring of many Czech and Slovak companies, including, for example, Becherovka, the famous Karlovy Vary (Carlsbad) drinks producer that was acquired by Pernod Ricard of France, the Slovak white goods maker Tatramat (acquired by Whirlpool) and BAZ Bratislava (acquired by the Volkswagen Group). While at CSFB, Mr. Bakala launched the first Czechoslovak government bond.

Under his leadership Patria Finance developed an asset management business, built a large M&A practice and pioneered the provision of corporate finance products and services to Czech companies during the 1990s, including the first corporate bond.

Mr. Bakala was a member of the preparatory committee that worked on the establishment of the Prague Stock Exchange and was a member of the board of the Exchange from day one; from 2005 to 2010 he was a member of its supervisory board.

In 2004 he led what was then Central Europe’s largest ever leveraged buy out when
the predecessor to BXR acquired the Karbon Invest group, a Czech mining and
resources trading concern centred around OKD, a coal mining company that has its
roots in the iron and coal business founded by the Rothschild family in the 19th

BXR undertook a textbook restructuring of Karbon Invest’s 56 companies to
create several stand-alone businesses, including Advanced World Transport, a rail
and logistics company, Green Gas International, a clean energy company, RPG Real
Estate, which manages one of the largest residential property portfolios in Central
Europe, and New World Resources (NWR), Central Europe’s leading hard coal and
coke producer.

Mr. Bakala and BXR took NWR public in 2008 via an Initial Public
Offering on the London, Prague and Warsaw stock exchanges. The flotation of NWR
valued the company at approximately £3.5 billion – the largest IPO on the London
market that year, and to date the largest transaction of its kind in the Central
European region. Mr. Bakala is vice-chairman of NWR plc.

In 2006 Mr. Bakala acquired a majority interest in, and so rescued, the Czech
Republic’s highly regarded current affairs and news-analysis weekly magazine,
Respekt, and in 2008 he and BXR acquired Economia, the leading publisher of
business newspapers and magazines in the Czech Republic and Slovakia.

Today, BXR is a truly global investment group with holdings in the Americas, Europe
and Asia. BXR has interests in coal, iron ore, transport and logistics, financial
services, commercial and residential property, green energy, furniture, healthcare,
publishing, retail and others.

Mr. Bakala is a keen cyclist, and in 2011 he concluded the acquisition of a majority
shareholding in Team Quick Step, an international professional cycle racing team that
is based in Belgium.

Mr. Bakala’s philanthropy includes support for the Vaclav Havel Library in Prague, the DOX Centre for Contemporary Art in Prague, the PORG School in Ostrava, and the Zdeněk Bakala Foundation, which provides scholarships to Czech students studying abroad. He has endowed a professorship at the Amos Tuck School of Business Administration and has given generously to the Hilton Head preparatory school in South Carolina.

His latest project is assisting the establishment of The Aspen Institute in Prague. He is married to Michaela, the former Miss Czechoslovakia 1991 and a successful businesswoman in her own right, currently leading LBM, a major luxury goods and lifestyle group in Central Europe. Zdeněk and Michaela have three children: Anabel, Aron and Aram. From his first marriage Mr. Bakala has a son, Franklyn. Mr. Bakala holds US and Czech citizenship, and lives just outside Geneva, Switzerland.

Charles Harman is Chief Executive Officer of BXR, a diversified industrial group co-founded by Zdenek Bakala. He previously spent twenty six years as an investment banker, most recently as Head of UK Investment Banking at J.P.Morgan.

Charles was born in the UK and educated at Eton College and Oxford University. While at Oxford he had his first experience of Africa, paddling a small boat 1,200 miles down the River Niger with three friends following the route of the early nineteenth century Scottish explorer Mungo Park.

Charles joined Credit Suisse First Boston in 1984 and subsequently spent three years working for CSFB in its Tokyo office. He returned to London in 1990 to become part of the bank's team focusing on the newly opened markets of Central and Eastern Europe. 

In1995 he left to join MC Securities, a start up bank focused on the Central European countries, and was appointed CEO of MC Securities in 1996. From 1997-2001 he was a Managing Director and Head of Emerging Europe investment banking at Donaldson, Lufkin & Jenrette. He joined Cazenove, which subsequently became part of a joint venture with J.P.Morgan, in 2001 and was appointed Head of Corporate Finance of J.P.Morgan Cazenove in 2008 and Head of UK Investment Banking for J.P.Morgan a year later.

Charles lives in London and also has a home in Cape Town which he visits regularly. He first visited Cape Town in 1991 and has been a passionate enthusiast of the Western Cape ever since. He is a keen tennis player and cyclist, who has competed in the Cape Argus cycle race every year since 2005. He has been married to Charlotte Harman, an art historian, since 1987 and they have two sons (Alexander and Will) and a daughter (Alice)."