Novator

"well. At Novator we have developed much longer risk matrixes and are operating on quarterly rather than annual balance sheets, which makes the risk factors much more transparent."

"We have changed how we function internally, of course. In terms of risk management, we at Novator spend much more time on analysing risks in each project in our group than before."

"Deals are in my nature, but nature evolves and I need to as well. At Novator we have developed much longer risk matrixes and are operating on quarterly rather than annual balance sheets, which makes the risk factors much more transparent."

"Through Novator, I saw myself pursuing a number of strategies. I could be an activist in a public company or a caretaker or midwife in a private equity situation, taking assets, cleaning them up and getting to a position from which I could exit."

"I was in New York for a board meeting and I met up with Siggi in the Waldorf Astoria Hotel to flush out what Watson’s ideas were. Joining us in the meeting was Watson’s chief executive Paul Bisaro. As they began to describe their vision for the company and the sector, I couldn’t help but smile at the irony of it. Paul and I had crossed swords before in the very public battle for the Croatian pharma company Pliva, where we had each fought with every trick we knew. He had won and I had lost. That was water under the bridge, and I explained the situation for each of the stakeholders in Actavis. Deutsche Bank was looking for no risk at all, while my Novator vehicle was willing to look at the big picture in terms of future value creation. Watson’s idea was to pay with cash and stock, and clearly that would not work for Deutsche, even if it could work for us. I needed to find a way to make this work for both the bank and Novator. As they say, the devil is in the detail."

"Under our stewardship Play became the fifth-most-valuable brand in the country, greatly increasing the value of my 50 per cent holding. In the ten years since launch, Play gained more than 15 million subscribers, becoming Poland’s biggest mobile phone operator, with a 28 per cent subscriber market share. Novator led a flotation of Play on the Warsaw Stock Exchange in July 2017, with a market capitalisation of €2.2 billion. The company distributed more than €330 million in dividends over the following three years, and Novator fully exited in 2020, selling its remaining stake to French investor Iliad Group, led by Xavier Niel."

"Branding is a personal passion of mine, dating back all the way to the Bravo venture in St Petersburg, and it felt exciting and invigorating to be essentially building a start-up again. But what should we call our new baby? After discarding an initial notion to use the Play brand, we looked for a similarly dynamic name behind which to build a challenger, customer-centric culture and asked half a dozen marketing agencies to pitch their best ideas. None of them came up with anything that we liked, but another firm which had not been invited to pitch came up with a left-of-field suggestion that resonated with us straight away. Its concept was to brand the challenger around the ‘word-of-mouth’, viral way that we wanted to grow through personal recommendations offering great value and customer-centred service. ‘Word of mouth’ was shortened to WOM and that became our brand. My idea was to build a new Latin American challenger mobile telecoms brand using the playbook of Play in Poland and Nova in Iceland. I could use the same management team and external consultants who worked on both. The partners at Novator responsible for telecoms, who had worked with me since 2010, focused on financing the new venture and acquiring the necessary spectrum and telecoms licences. Chris Bannister, a personable Brit who became Play’s first chief executive in 2005 and had already lived and worked in nine countries, was brought back into the fold as chief executive. And the Icelandic chief technology officer oversaw the technical build-out design, along with his Swedish colleague. Members of our trusted teams from both countries helped in the beginning to transform a failed old-school US telecoms operator into a state-of-the-art ‘kick-ass’ mobile challenger. None of us spoke Spanish and most had never set foot in Latin America before, let alone Chile. It didn’t seem to matter. When we launched, Chile was the most expensive country in the Latin American region in mobile telecommunication, so we saw a market that was fertile for a new approach. Conventional new entrants like Nextel and a venture headed by US telecoms billionaire John Malone had failed to crack the nation. We needed to do things very differently. To achieve the maximum impact and truly disrupt the market, we knew that a key differentiator had to be price. Indeed, we priced our services so aggressively that Chile immediately became the cheapest country in South America for consumer mobile telephony. Alongside this value offer, we promoted WOM as an independent challenger offering honesty and integrity. We set out to be brave, innovative, bold and passionate."

"I am proud to say that I kept my word, and the commitment I made to fully repay all debts came true ahead of schedule. In August 2014, the comprehensive settlement between myself, my investment company Novator, and the Icelandic and international creditors was successfully concluded. A total of 1,200 billion Icelandic krona had been paid, with 100 billion krona specifically allocated to Icelandic banks and their subsidiaries, marking the completion of the settlement process. It´s interesting that Icelandic banks had less than 10 per cent of the claims, because of the international nature of my business dealings."

"Deutsche Bank, which had a lot of money at stake, insisted that I do two things. First, I had to put more money into Actavis. This was bad news, but I used all my remaining funds and injected €150 million into the company as fresh equity on top of the roughly €1 billion that I had put in initially. Second, Deutsche Bank insisted that I look for a buyer for Actavis, which I duly did with the help of Merrill Lynch Bank of America. Needless to say, trying to sell the company in this environment and with these internal issues proved futile. The indicative offers we received reflected the parlous state of the company and were very disappointing. We abandoned the sale process and set about coming up with a rescue plan. My Novator investment company presented a six-point plan, but getting Deutsche Bank to engage in discussing this and making a decision proved difficult."

"That is history now and I’m glad to say that I have made good on my promises to repay my creditors and stick to the terms of the restructuring settlement that was reached in 2010 between myself, my investment company Novator, and all of our creditors. This agreement was projected to take approximately five to six years to fulfil, and an army of around 100 lawyers, accountants and other specialists worked tirelessly on it. The forensic accounting process was immense and spanned nearly a year and a half, and I am sure that such thorough practices were not employed in the cases involving others connected to the Icelandic banking system. As part of the settlement, I relinquished most of my personal assets, including various apartments and holiday houses, a private jet and a yacht. Moreover, I granted creditors complete access to all of my bank accounts to ensure that all my assets were on the table."

"My attempts to parachute into a special situation in listed equities were not always welcomed. In the UK, I tried to take Cable & Wireless private, meeting a couple of times with its then chairman, Richard Lapthorne, who listened to my idea to break the group in two, told me the company wasn’t interested and then proceeded to do pretty much what I had suggested. Some deals also went spectacularly wrong. One was a former Finnish co-operative, Amer Group, which owns some of the world’s largest sports brands and equipment-makers, including Wilson, Salomon and others. It had a large private golf club in Helsinki and a big chalet in Courchevel, which to us looked like corporate excess. The idea was to sell off the Wilson and Salomon brands, but we faced opposition from the board and, as happened with Elisa, we ran out of time when the markets crashed and we had to retreat from aggressive positions, focusing instead on fire-fighting in our bigger investments. I wanted to merge Amer into something bigger, and Novator, the investment company I had set up in 2004, had a meeting with the chief executive, Roger Talermo, and his Finnish institutional shareholders. I could see so much potential to shake up the company. There were 83 staff in the Helsinki headquarters, which could easily have been run by five because there were no operations in Finland. Salomon was run from France, Wilson from Chicago and other operations from Seattle. I wanted to fire Talermo and call a shareholder vote. We couldn’t convince the other shareholders, but shortly after we exited – I had lost about €60 million on my investment – it was announced that Talermo was leaving the company."