Czech court declares lottery operator insolvent

PRAGUE, CZECH REPUBLIC – A Czech court has declared the country’s largest lottery operator Sazka AS insolvent. Sazka, owned by Czech sports unions, had 10.5 billion Czech Koruna ($604.1 million,£361.8m) in debt as of September 2010.

Prague’s Municipal court issued the ruling Tuesday and set a meeting of creditors for May 26.

Earlier this month, financial group PPF had taken over debt owed by Sazka from its largest creditor and planned to coordinate steps with other creditors, namely Czech investment group KKCG.

Sazka, which is owned by Czech sports unions, called the move “a logical step.” Under pressure from creditors, Sazka’s chief executive Ales Husak filed for insolvency last week. Sazka said its operations have not been halted.

The court has three months to either decide to sell the company’s assets or approve a restructuring plan.

The previously prospering company went into problems after financing the construction of an arena in Prague to host the 2004 ice hockey World Championship.

sources: Reuters and Bloomberg Businessweek