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Rohlík.cz announced crazy 10% bonds. Brilliant investment or economic suicide?

Jamie Cameron
7. 10. 2022
4 min read

A topic that has been rumored for some time - Rohlík wants another billion from bonds. These are extremely attractive to investors with their yield of 10% per annum. But many experts believe they could be fatal for the company.

Rohlík.cz is under the baton of Tomáš Čupr

Earlier this year, Rohlík.cz raised almost €200 million from foreign investors. That is almost five billion crowns. The money, primarily from Partech and Index Ventures funds, shot it to the position of the highest ever startup investment in the Czech Republic. Some of the money also came from J&T Bank or R2G.

Few would ask for more. But this is not the case with Tomáš Čupr, who has already built several successful projects - e.g. Slevomat and Dáme jídlo. The founder of two highly successful companies is now stepping on the gas again and wants another billion from bonds.

The fact that he wants money for further development was rumored during the holidays, when Rohlík.cz published a document about the decision of the chairman of the board (i.e. Čupr) to increase the amount of bonds from 2.5 billion to more than 3.5 billion crowns.

This part of the document indicated that the increase could occur

This was only officially confirmed by the publication of the CNB document on 22 September. It approves the increase in the volume of bonds by CZK 1 billion. The maturity date of the bonds is 1 February 2026.

Part of the document dated 22 September 2022

Suicide yield?

That wouldn't be entirely strange, given Chupro's style. What has puzzled many investors is the yield on these bonds. This is set at 10% p.a. - which, given the current situation, makes sense, but according to many voices on the internet and in discussions, is a very risky move. They claim that this could be the beginning of a spiral in which Rohlik will not be able to repay and, more importantly, stop it.

But I believe that the company's management and its institutional investors are highly experienced managers and experts who have everything perfectly calculated. We can also assume that there will be an incredible scramble for such bonds. Already the previous batches have gone quickly. The spring issue was announced with an interest rate of 5.5%.

Apparently, it should be possible to buy the bonds through J&T Bank. The latter states the following:

Rohlik.cz Finance a.s. is issuing five-year secured bonds with a fixed interest rate of 10.00% p.a. Interest will be paid semi-annually. The nominal value of one bond is CZK 10,000. The total volume of the Issue is CZK 3,550,000,000.

How is Rohlik?

In our country, the food giant has already spread almost everywhere. And that is why Čupr is not slow to expand abroad. And it's growing fast. In Germany, for example, they have already started deliveries in Munich, Frankfurt and Hamburg under the name Knuspr.de. They are also expanding in Hungary. Italy, Romania and Spain.

Significantly, they have not been significantly slowed down even by the return to normal after the pandemic measures were eased. That is to say, people have got used to the imports and are not returning to the supermarkets. Rohlik reported a turnover of CZK 12 billion for 2021 and handled 10 million orders.

CEO Tomáš Čupr is one of the most prominent business figures in the country. Given his track record, investors have a solid chance that he can steer the biggest startup in the right direction and build - as he plans - a pan-European giant.

https://www.youtube.com/watch?v=tY5Ulx_Ht3o

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Disclaimer: This is in no wayan investment recommendation. It is purely my summary and analysis based on data from the internet and several other analyses. Investing in the financial markets is risky and everyone should invest based on their own decisions. I am just an amateur sharing my opinions.

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