Final Word from Monday, December 8, 2025
Andrej Babiš will be appointed Czech PM tomorrow, after having announced on Thur. that he'll give up Agrofert and not have any further economic relationship with it. His children won't benefit from it until after he dies, which means the company's retained earnings and other reserves (currently Kč 117.4bn, or €4.9bn) will be locked up indefinitely. Until Babiš transfers Agrofert into a trust structure, he can take any financial steps he wants, including paying dividends to himself. However, a large payout could hurt the company financially and might violate loan covenants (bank debt is Kč 39.6bn). A logical solution in a similar situation would be a conditional dividend payout structured over many years, based on performance metrics and ratios. However, that would be a blatant violation of Babiš's conflict-of-interest vow to Pres. Petr Pavel and the public. Babiš promised not to have any further economic relationship with Agrofert, so he must decide now how many billions to leave in long-term lock-up. [ Czech Republic lockup financial blind trust Kč 40bn annual report ]
Glossary of difficult words
lock-up - a period during which investors must wait to access their funds;
retained earnings - the cumulative net earnings or profits a company keeps after paying dividends to shareholders;
financial covenant - a formal agreement requiring a borrower to maintain certain ratios and metrics to prevent default on loans or bonds;
metrics - a set of figures or statistics measuring results;
blatant - very obvious; completely lacking in subtlety.