4K Invest remains silent after Adria collapse


Turnaround fund 4K Invest, which part-owned Adria Airways until its demise on Monday, has remained silent since the company declared bankruptcy. The Munich-based fund, registered in Luxembourg, which oversaw the bankruptcy of two carriers under its control over the past three years, has shut down its website, but remains in business. Out of the five most recent investments in its portfolio, four are either out of business or undertaking bankruptcy procedures, with just one, textile producer TWD Fibers, remaining profitable. There have been calls to investigate 4K Invests’ role in Adria Airways, with suggestions the fund funnelled money from the company, although there is no concrete proof to back these claims. Authorities have said they are ready to scrutinise the turnaround fund if there is evidence of any wrongdoing.

Swiss authorities are also looking into 4K Invest for its role in the collapse of Switzerland’s Darwin Airline, which was branded as Adria Airways Switzerland in its final year. A Swiss public prosecutor opened criminal proceedings after the bankruptcy office in Lugano drew his attention to suspected irregularities. The company has been accused of bankruptcy fraud and mismanagement. 4K’s questionable business moves involving Adria included the sale of its brand name, as well as absorbing the STBE company in December 2018, resulting in Stefan Beulertz, who was the head of STBE, becoming Adria's part owner. Mr Beulertz, a lawyer based in Malta who is close to 4K Invest, was implicated in the Paradise Papers, which exposed the rogue offshore finance industry.


The Slovenian Ministry for Infrastructure noted last week, “Minister [for Infrastructure] Alenka Bratušek repeatedly warned that the airline’s sale to the German capital fund was a mistake and that the then government of Slovenia should have found a strategic partner within the aviation industry that would have ensured the long-term existence and development of the carrier”. The Slovenian Prime Minister, Marjan Šarec, branded 4K Invest as “crooks”, noting that, “They obviously see the country as a cash cow, from which they want to milk the last cent and take it to somewhere unknown”. It has been reported that executives from 4K Invest who managed Adria Airways left Slovenia several days prior to the company declaring bankruptcy, despite the company insisting it was in talks with “potential strategic partners for Adria” until its last day.




Comments

  1. The political responsibility of selling Adria to these idiots should also be investigated. Who chose 4K Invest over two other bidders and why?

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    Replies
    1. Starting with Pocivalsek.

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    2. Seeing as he is working on setting up a new airline, has anyone asked him how he allowed for JP to be sold to 4K Invest?

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    3. Our previous government paid 4K to take over Adria and to basically close it down for them.

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    4. I hope one day it will be clear who in Slovenian politics was behind this "give-away" of a national asset from one pocket to another.

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    5. Adria was not a national asset, it was a national liability. Stop romanticising a business that was loss-making for the entirety of its 58-year existence.

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    6. Calm down, Vlad. Welcome to the world of the vast majority of aviation.

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  2. 4K Invest will probably just change its name and continue buying and bankrupting companies.

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  3. I think that they have gained what they wanted - to deploy milions to bank account in some third country.

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  4. "Out of the five most recent investments in its portfolio, four are either out of business or undertaking bankruptcy procedures”

    Well done.

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    1. not well done, but that is the very nature of their business; acquiring very distressed assets, investing a little, and hoping that a few percent of those assets make some money

      if there were some value in adria, there would have been a buyer that would have paid a real price back then.

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  5. I really never saw a bigger bunch of incompetent people than this 4K. Selling brand name, trying to scam Sukhoi, insisting that everything is ok in the company, publishing winter timetable and announcing new routes literally days before the company went bankrupt…

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    1. They are not incompetent at all, they are very good "con men" ie. they are in business of making people believe them and then puling out money. Simple as that.

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  6. Such a shame Adria was sold to them. Maybe things would have been different.

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  7. When they sold 4K to Adria I wrote here that I hope it doesn’t end up like Balkan Airlines, who was also sold to a fund. Conclusion is that airline’s should not be sold to investment funds.

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    1. Selling to P.E. or an investment fund is not in itself an issue - provided that:

      1. They had a track record in aviation (which these guys never had), or

      2. That the fund or P.E. is hugely cashed up (which these guys never were, given the debt that Adria Airways had when they took them over).

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  8. "We fix it”, the irony.

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    1. What irony ? Fix it they did - permanently !

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  9. Lol I love how their rating on Google is 1 star because Slovenians have been leaving angry reviews :D

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  10. Did anyone do any screening of this company before they sold Adria??

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  11. Can you believe that the Montenegrin govt were in serious discussions with these fraudsters re YM ? Although in that one, I'm not sure who was pulling the bigger con job - the govt over 4K or 4K over the govt !!!

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    1. I was just about to write this. Montenegro Airlines came dangerously close to being sold to 4K.

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    2. I wonder what would have happened if they did buy MGX. Would Adria's life span had been longer or whatever it would make no difference.

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    3. They would have gone under faster than Darwin did under 4K's ownership ....

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    4. Common you guys, these 4K bozos are still little league for Milo and company. They saw right through them in no time

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  12. Well at least the Swiss are more serious and will prosecute these 4K cronies.

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    1. I doubt about that. They will never be prosecuted because of destroying Darwin.

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    2. Why? It says in the article that a criminal investigation is under way.

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    3. there is no information public, that the "investigation" is moving anywhere yet
      being bad at management is not even in switzerland a criminal offense, and to prove that they did some real large fraud, will be difficult to prove considering all information that gets circulated. everything that gets mentioned are just minor ofenses and neglect, but no criminal offenses

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  13. Who bought the brand? Someone gave cash for the brand... Did that include the codes as well (JP&ADR) Perhaps JP and ADR with the brand can be reused... this time with more substance, after the dust settles. Adria has leverage, the brand may be tarnished but I would still prefer Adria over Air Slovenia.

    On the other hand Dear Mother is well prepared:
    Brussels – Ljubljana eff 04NOV19 6 weekly A319
    Frankfurt – Ljubljana eff 27OCT19 2 daily CRJ900
    Munich – Ljubljana eff 01NOV19 1 daily CRJ900
    Zurich – Ljubljana eff 16OCT19 5 weekly Embraer E190 by Helvetic (7 weekly from 27OCT19, operated by A220-300)

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  14. I'm surprised there has been no political fallout from this. I mean 500+ people lost their job.

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    1. Yet the people who made this decision are all still employed and now working on a new plan - GOD forbid !

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    2. Considering most Slovenians cheered for bankruptcy I'm not surprised there is no political responsibility.

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    3. Back in 2016 when Adria was sold to 4K everybody knew they are damaged beyond repair and Adria being sold to 4k takes off the steam from politicians

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  15. This is why you don't sell strategically important companies to unknown investment funds with no experience in aviation business.

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    1. We see how long it took for other airlines to replace "strategically important company" - 2 days.

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    2. 1) it was not an unknow fund back then,
      2) it was not really sold; they gave the company and some money away, and still there was practically no interest
      3) since we are in EU, it lost all its strategic significance
      4) if it wasn't for JP, we probably had much better conectivity now

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  16. I read a report in the media about the financial mismanagement at Adria by 4K and the tricks they used to show a more positive balance sheet. The things they did were crazy. Selling and buying the brand name, offshore accounts, creating and bankrupting companies etc. Really murky business.

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  17. When I remember how excited people were when 4K took over...

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  18. Who is behind this 4K company? Who owns them? What companies do they own? I thought Germans and the EU were beacons of transparency.

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    1. There were various theories. One even involved Iranians :D

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    2. Everything points to Lufthansa being behind 4K.

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    3. Germans are more than willing to assist Turkmenistan's dictatorship with surveillance equipment and Lufthansa are helping to get the national carrier, still banned from flying within the EU, back in the air. I wouldn't therefore assume just because 4K are German that it has to be a paragon of virtue, or a beacon of transparency.

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    4. JP was not owned by 4K, but by its partially owned AA International Aviation Holding GmbH

      the ownership of 4K is public, as well as the other owner of AA International Aviation Holding GmbH is no big secret; but I guess it is beacuse of our love for conspiracy theories that we have to read BS like iran or lh

      @anon 10:28: the german registers are all public (but not all free), it is the luxembourg and malta registers that are more tricky for the unexperienced; but google is your help ;-)

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    5. Oh please, AA international is 100% owned by 4k.

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  19. “Minister Alenka Bratušek repeatedly warned that the airline’s sale to the German capital fund was a mistake and that the then government of Slovenia should have found a strategic partner within the aviation industry ...”
    but wasn't Adria sold to 4K during the time Bratusek was a pm?

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    1. No, it was sold 3 years ago, when Miro Cerar was PM. During the Bratušek government, Adria was marked as "to be sold".

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  20. It all looks very dodgy!

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  21. If you google Stefan Beulertz stuff from the International Consortium of Investigative Journalists Offshore Leaks Database comes up.

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    1. Well the first red flag is that the company is registered in Malta :)

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    2. Yep, like it says in the article he is featured in the Paradise Papers.

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    3. Stefan Beulertz

      His name appeared in the so-called Paradise Papers, published by the International Consortium of Investigative Journalists (ICIJ) at the end of 2017. In 2006, Beulertz established six companies based in Malta, a tax haven.

      His company STBE ought to pay eight million euros for the brand, but Adria never saw this money. A company which was not formally affiliated with Adria at the time returns the purchase price to it by deducting license fees each year.

      TBE generated revenues of approximately 2.2 million euros in just one year. With the current dynamics, in just a few years, they would pay the entire purchase price, after which the royalties would flow in the net profit.

      Adria, on the other hand, remained not only without a significant portion of its assets, but also lost the insignificant income received by STBE from the end of 2016.

      Now the Germans have decided to return their brand due to bad economic conditions. After having already produced eight million euros of capital on paper 2016, which has generated another million euros of capital again.

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  22. How many companies or affiliated companies does 4k have?

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    1. 1 is only left in business.

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    2. there are still about 20 GmbH that are regsitered for their address that have 4k in its name, and have the sole purpose to hold shares of other companies

      normally ones sets up one holding GmbH for each investment

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  23. And of course no one will blame the Civil Aviation Agency. Instead of making sure that the scam ended as fast as possible, they let companies in Slovenia to further accumulate debt towards Adria/4K, which will never be paid.

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  24. It was a mess before the Germans came too.

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    Replies
    1. They just fast tracked the process :(

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  25. Cayman Islands are beautiful. Great place for stressed Euro businessman to relax and leave all the worries behind.

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  26. if someone wants to try Swiss first time in life or wants just to fly LX again, ZRH-LJU return available for 89 CHF.

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    Replies
    1. And for a fair price you will also get really good hard product with their A220 aircraft.

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  27. Air Slovenia project is already dead. Thank god!

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    Replies
    1. There is still hope, as free market is offering FRA or MUC flights with ridiculous time schedule from only 510eur. On the other hand, well done job at SN, LX and especially JU for good pricing for flights from LJU.

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  28. Political people / Non-airline people leading an Airline?
    or
    Non-airline company leading an Airline ?
    Means =The End of the Airline!

    Airline industry is not for everyone 100%

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  29. 4K is not a investment nor turnaround fund. 4K invest is a asset stripper. They did a brilliant job in Adria. Minimum risk and investment and maximum return of investment. The responsibility of why Adria Airways has failed should lie with the politicians who sold Adria to this equity fund.

    ReplyDelete

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