Like J&T and Istrokapitál, Penta also began as a small brokerage founded by four ex-schoolmates, two of whom had attended the Moscow Institute of International Relations. Unlike J&T, the Penta founders had no easy access to capital, but when the opportunity of a lifetime came along – the chance to take over the largest privatisation fund in the country, VÚB Kupón – they didn’t hesitate. Penta borrowed Sk350 million from SLSP, another 500 million from Slovenská poisťovňa, and talked VÚB into selling. All three state institutions at the time were under the control of nominees of Mečiar’s HZDS party.
VÚB Kupón controlled assets of about Sk7 billion. Penta transformed it into a joint-stock company, and then split the firm into two entities, Intermark and Istrofin. Intermark was sold to repay Penta’s loans, while Istrofin was later sold to the Istrokapitál financial group, and wound up in bankruptcy. Most of the firm’s 160,000 small shareholders got nothing in return for their stakes.
Penta partner Jaroslav Haščák says that the firm has never been able to shake the negative image it acquired from its beginnings.
“People remember how we got our start,” he said. “We sold our majority stake in VÚB Kupón, and someone stripped the assets. That’s it. And even though we never stole anything and never even made a single dishonourable transaction, the people responsible for stripping those assets were never punished.”
Part of the firm’s image problem has also been its aggressive tactics. Using the many stakes that VÚB Kupón had in blue chip firms, Penta repeatedly challenged the management of those companies to either sell their shares or buy Penta out at a handsome profit. Battles were fought over firms such as Chemolak, Elektrovod, and Novoker, while Penta’s stakes in IRB, VÚB, SP and VSŽ forced the state to settle with Penta before it could privatise the assets.
Penta has never denied its corporate raider style, and has even had ‘Penta Sharks’ T-shirts made up. Haščák said that aggressive tactics were part and parcel of the high-risk projects his company specialised in. “High-risk projects that don’t work out lead to a more aggressive approach to creating value, which means that I may lay off more people, and cut out and sell the less healthy parts of my company.”
Apart from private-equity style deals, such as Ozeta and ZSNP, Penta has also become heavily involved in real estate, private banking, and healthcare. In 2006 the firm employed 11,000 people in its various companies, had €460 million in equity, and earned €160 million in profit.
7. Jul 2008 at 0:00 | Tom Nicholson