He was last heard of in the late 1990s, when he fought for shares in the Prague department store Kotva. Now British entrepreneur James Woolf and a small band of shareholders want to control the development company Orco, which asked for court protection against creditors in April owing to debts reaching EUR 1.6 billion. “There are various possibilities for Orco,” Woolf told HN. “Joining forces with us is one of them; bankruptcy is another.”
Flow East, Woolf’s company, holds three buildings on Wenceslas Square, including the Hotel Jalta. Woolf says the firm has some 1,500 projects – seven times as many as Orco.
Woolf says he wants to become the new head of Orco to replace the company’s founder, Jean-Francois Ott. “We are now looking for support among shareholders. We will seek changes in the management in which I could participate – let’s say the post of chief executive,” he said. “The standing management launched a number of projects that they often bought far above their real value. The company needs to be downsized and needs money,” he added.
Woolf has teamed up with the shareholder association SOS Orco, which claims to represent 14% of shareholders and is collecting votes in order to take control of the general meeting. Theoretically, they can succeed. Orco is in trouble, and its shares are distributed among a large number of people with small stakes. For instance, Ott until recently controlled the company with a mere 12% of shares.
Nowadays Ott has only 1.6%, but he wants to resist the invasion. He said that the information about a 14% stake controlled by SOS Orco is untrue and filed a lawsuit against association head Luboš Smrčka for slander and the release of false information. Ott also has filed a complaint against the SOS Orco shareholders with the Czech National Bank. In March and April, when Orco repeatedly postponed the release of its results and asked for protection from creditors, trading in its shares increased considerably. The company says information released by SOS Orco was one of the reasons behind the rise. Shares then could be purchased at a different price than the market rate, the firm says.
Otherwise, Orco representatives won’t comment on the activities of Woolf and the association. “Our focus is on talks with Colony Capital,” spokeswoman Petra Zdeňková said. “They are now analysing our projects,”
The US firm Colony Capital is in talks to buy new Orco shares worth a total of EUR 165 million, which would bring it a 60% to 70% stake in the company. In other words, it would prevent small shareholders from taking control of the company. But Woolf said the deal is not likely to be put in place, at least not under the conditions that were made public.