Kraft Heinz Company

Facebook

AmTrust Financial Services

Borussia Dortmund

Teva Pharmaceuticals

European Metals Holdings

Hilton Hotels & Resorts

Vienna Insurance Group

Unipetrol

O2 Czech republic

Activities

Kraft Heinz Company

Company: KRAFT HEINZ COMPANY
Status: Running
Entry: 3rd quarter 2018
Stock exchange: KHC:NSQ, USA
Volume: 100 million USD

Description:

Krupa Global Investments has taken advantage of the long-term decline in shares of the Kraft Heinz Company. Iconic brands such as Heinz, Oscar Myers, Kraft or Philadelphia are losing market share and margins, because their customers prefer healthier eating options. With that said, KGI believes that Warren Buffett and 3G Capital will consolidate the company, make strategic acquisitions and introduce new strong brands that will re-start growth. Moreover, we believe that Buffett and 3G Capital should put more capital into Kraft Heinz and consider making a fair price buyout to allow themselves to make acquisitions without day to day market pressures. We are actively communicating with all relevant stakeholders regarding our ideas and concerns to preserve the Kraft Heinz brand and increase shareholder value.

 

Facebook

Company: FACEBOOK
Status: Completed
Entry: 7/2018
Exit: 8/2018
Stock exchange: FB:NSQ, USA
Volume: 60 million USD
Return: 100 % p.a.

Description:

Krupa Global Investments bought a significant position in Facebook in the aftermath of the 2nd Quarter 2018 results where shares dropped sharply due to fears a slowdown in user growth and margin squeeze in the future, mainly linked to the cost of GDPR and Facebook’ steps to protect user data. In the last quarter, Facebook stock also suffered due Cambridge Analytica scandal where Facebook users’ data was used for political purposes. While this matter also had a negative effect quarterly results of the company, KGI assessed this decline as an opportunity for rapid upside potential. Facebook’s stock price has swiftly reversed trend after the recent fall in stock value, because the world’s largest social network still has great potential–primarily in better monetizing of its users in the Asia Pacific region. Currently, 2/3 of its revenue is generated by 1/3 of the users from the EU, US and Canada.

AmTrust Financial Services

Company: AmTrust Financial Services
Status: Running
Entry: 1. quarter 2017
Stock exchange: AFSI:NSQ
Volume: 50 million EUR

Description:

During the final months of 2017 we purchased large amounts of AmTrust shares. At that period the price of AmTrust shares was catapulted from USD 10 to USD 13 after the announcement indicating that Karfunkel family (43% stakeholder) and Stone Point Capital intended to initiate a buyout at a price of $12.25 per share. We were convinced and are still convinced that the company has much larger potential in the range of $22 to $35 USD per share.

We started an initiative– www.ProtectAmtrustInvestors.org and got in touch with legendary activist investor Carl Icahn, who subsequently acquired a stake of his own in AmTrust. We thus managed to defeat the proposed $13.50 per share offer and achieved an increase of the purchase price to USD 14.75. We still strongly believe that this is an absurdly low offer by a majority shareholder which undervalues the company significantly. Thus, we plan to continue a PR and Legal campaign for as long as is needed to obtain a fair value for shareholders.

Borussia Dortmund

Company: Borussia Dortmund
Status: Running
Entry: 1. quarter 2018
Stock exchange: BVBX:GER
Volume: 9 million EUR

Description:

Investing in the BVB football club is interesting to us for several reasons. From a financial perspective, our view is that shares are undervalued and thus we believe they will appreciate significantly. From a strategic perspective, one major strategic goal of  the Arca Capital group is a focus also on Germany and German speaking countries. Finally, the investment ties into our broader involvement in football. We have long been a major supporter of youth football in the Czech Republic with the Ondrášovka Cup project, which is associated with our subsidiary company Ondrášovka, a mineral water producer.

We intend to become a major shareholder of BVB. Our ambition is to buy up to a 10% stake.

Teva Pharmaceuticals

Company: Teva Pharmaceuticals
Status: Completed
Entry: 10/2017
Exit: 12/2017
Stock exchange: TEVA:NYQ
Volume: 10 million USD
Return: 60% p.a.

Description:

In the end of 2017 Krupa Global Investments closed out our position in Teva Pharmaceutical Industries with a significant profit. Our position amounting USD 10 million was held for about one month and a half.

At the beginning of November 2017, Teva’s shares fell to long-term lows due to fears that the company, deep in debt through the acquisition of Actavis, would not cope with margin pressures and expiration of patent for its key product, Copaxone. In mid-December the newly appointed CEO Schultz introduced a restructuring plan, which had a positive impact on the stock price prompting us to purchase shares. With that said, the plan involved aggressive cost cutting including the dismissal of 14,000 employees (1/4 of all employees) and redemption of a part of the heavy debt. We felt that this would be a complex process with a lot of risks that may have a negative impact on the price of shares. Therefore, we exited our position but we continue to keep an eye on Teva.  We are prepared to take up our position again if shares fall significantly in price.

European Metals Holdings

Company: European Metals Holdings
Status: Running
Entry: 10/2017
Stock exchange: EMH: LSE
Volume: 2 million EUR

Description:

Krupa Global Investments is one of the largest shareholders of European Metals Holdings (LON:EMH). EMH’s whose Czech subsidiary company Geomet, conducts lithium mining exploration at Cínovec and has future plans to carry out mining and processing there. Since we purchased shares, we have been actively involved in the project.

The project will significantly support research and development activities not only in the region but throughout the Czech Republic, while at the same time promoting education and increasing the employment of the skilled labour force.

We recently sent an open letter to the Board of Directors of European Metals Holdings due to their unsatisfactory leadership of the Cínovec Lithium Project. We are calling for a general meeting of the company.

As one of the largest shareholders of European Metals Holdings, we are concerned about the development of the Lithium mining project at Cínovec in recent months. As an activist investor, we are dissatisfied with the approach of EMH management and its representatives to the Czech state authorities and the lack of communication towards shareholders. We will continue to advocate on behalf of shareholders to make sure that the Cínovec Lithium Project is handled appropriately.

Hilton Hotels & Resorts

Company: Hilton Hotels & Resorts
Status: Completed
Exit: 6/2017
Stock exchange: HLT:NYQ
Volume: 10 milion USD
Return: 60% p.a.

Description:

We purchased Hilton shares after the so-called reverse stock split, where the company intended to unlock potential of different business segments. Considering that all of Hilton’s businesses are healthy, this logical step has created several companies, thereby increasing the value of Hilton as a whole. Three new entities have emerged: Park Hotels & Resorts, Hilton Grand Vacations and Hilton Worldwide Holdings. We took the advantage of the fall in share price and made use of this investment opportunity. We exited our position at a significant profit.

Vienna Insurance Group

Company: Vienna Insurance Group
Status: Completed
Entry: 1st quater 2016
Exit: 4th quater 2017
Stock exchange: VIE:VIG
Volume: 25 million EUR
Return: 20 % p.a.

Description:

We invested in Vienna Insurance Group (VIE: VIG) because it a stable Austrian insurance group doing business in the dynamically growing CEE region. The company’s shares were under selling pressure at the turn of 2015/2016, because VIG did not meet net profit expectations as a result of one-off operations (IT and goodwill depreciation). Also, the environment of low interest rates had negative influence on the company. From our point of view, the significant fall of stocks price was an overreaction to the reduction in profits and dividends. The company had a very strong balance sheet, was undervalued and showed relatively dynamic growth in new markets within the CEE region. Thus, we believed (correctly) that it was only a matter of time when the profits of the company would start to grow again and the negative sentiment about the stock would improve. This was confirmed in the second half of 2017 and we subsequently exited the position with a significant profit.

Unipetrol

Company: Unipetrol
Status: Completed
Entry: 1. quater 2016
Exit: 4. quater 2017
Stock exchange: UNIPE:PRA
Volume: 8 million EUR
Return: 80 % p.a.

Description:

KGI acquired a position in the refinery company Unipetrol at a time when the market did not yet properly appreciate its positive development. The stock price was squeezed to an extremely low level due to lack of a transparent strategy from the majority shareholder and also due to the accident at the Záluží site. Unipetrol, however, benefited from high refinery and petrochemical margins and also from the very good insurance policy that covered the repair of damaged technology and lost profits. Therefore, the company had record profits and additionally had a very strong balance sheet with no debt and with surplus cash. The re-commissioning of the damaged ethylene unit and the approval of the dividend contributed to the share price growth, which was additionally crowned by the voluntary takeover bid made by the majority shareholder.

O2 Czech republic

Company: O2 Czech Republic
Status: Completed
Entry: 2. quarter 2015
Exit: 3. quarter 2015
Stock exchange: TELEC:PRA
Volume: 12 million EUR
Return: 70% p.a.

Description:

Krupa Global Investments took a bold strategy and purchased O2 shares at the time when uncertainty caused by the vague intentions of the majority shareholder concerning dividing of the company pushed the value of shares to a historic low. Successful division of the company together with the fact that shares returned to trading on the international MSCI index led to an increased share price. This allowed us to withdraw successfully from the investment with a profit.

Media

5. 11. 2018 Download PDF

Open Letter to Kraft Heinz Board Members and Shareholders II.

Open Letters

Krupa Global Investments Releases Open Letter to board members and shareholders of Kraft Heinz. Download letter here.

5. 11. 2018 Download PDF

KGI Urges 3G Capital and Berkshire Hathaway to Take Kraft Heinz Private at $80 per Share

Press release

TheCentral Europe based investment firm, previously known as Arca Capital, plansto meet with key stakeholders to advocate for a fair price buyout of KraftHeinz in the aftermath of the Q3 2018 earnings report citing the difficulty ofreconciling critical investments with…

1. 10. 2018 Download PDF

KGI to Meet with State Insurance Regulators to Oppose AmTrust Privatization Transaction

Press release

The Central Europe based investment group is warning state regulators that the pending privatization transaction puts all policyholders at risk due to insufficient oversight and is continuing its campaign to stop AmTrust from going private. Arca Capital, one of the…

4. 9. 2018 Download PDF

Open Letter to Kraft Heinz Board Members and Shareholders

Open Letters

Krupa Global Investments Releases Open Letter toKraft Heinz Board Members and Shareholders Download letter here.

15. 8. 2018 Download PDF

KGI Calls on OKD to Launch Competitive Bidding for the Sale of Claims Against Bakala

Press release

Krupa Global Investments calls for the realization of OKD assets by conducting a sale of the claims of OKD against Zdeněk Bakala. These are several claims in the total amount of tens of billions of Czech Crowns. To acquire the…

12. 6. 2018 Download PDF

KGI Sends Open Letter to the Board of EMH

Press release

Krupa Global Investments, formerly known as Arca Capital Group, is one of the largest shareholders of European Metals Holdings (EMH). We are deeply concerned by recent troubling developments in regards to the lithium mining project at Cínovec. Specifically, we take…

21. 5. 2018 Download PDF

KGI together with Carl Icahn are going to oppose the AmTrust privatisation plan

Press release

Krupa Global Investments, the company known formerly as Arca Capital Group, is planning to form a coalition with Carl Icahn and other minority shareholders to prevent the proposed privatisation of the company. Prague – Arca Capital, one of the biggest…

13. 3. 2018 Download PDF

A significant investment in Borussia Dortmund football club

Press release

We perceive Borussia Dortmund as a strong and stable football club with positive PR and a strong supporter base. Borussia Dortmund has been keeping top positions in the Bundesliga for a long time and their player academy ranks among the…