Lisovny plastických hmot (LPH)

In 1992, EEIP acted as an advisor by privatization (managerial acquisition) of Lisovny plastických hmot Vrbno pod Pradedem (LPH), one of the leading Czechoslovak plastics producers. The privatization of LPH provides a rare illustration of successful MBO activity in the history of the Czechoslovak privatizations. The former management successfully acquired and restructured the company and was able to provide the entry of foreign investor (German firm GARDENA).

Due to restructuring, the company was able to improve the quality of production (acquiring ISO 2001 certification in 1996) and to access international companies such as IKEA, Hella and Vokswagen. LPH’s direct exports mainfolded and LPH reached after-tax profits of over CZK 20 million and positive cash flow of roughly CZK 50 million. Based on these strong results, LPH succeeded in repaying all of its privatization obligations by 1996. Its equity had risen from CZK 180,000 to over CZK 100 million.