Blackwater Founder Turns White Collar Boss, Helps China

Nearly five years after selling his notorious soldiers-for-hire business, the founder of Blackwater Worldwide is once again running operations in some of the world’s most hazardous places.

This time, instead of providing machine-gun-wielding contractors, Erik Prince is offering Chinese customers logistical support to get in and out of African danger zones. The ex-Navy SEAL and CIA operative, now chairman of Hong Kong-listed Frontier Services Group Ltd., predicts the outlook is bright for his new company.

“We help people get their projects up and running and once they’re up, keep them running,” Prince, 45, said in an interview in Hong Kong. “We get busy when things are good in Africa and we stay busy when things are sometimes not good.”

While Prince’s new company is small relative to the billion-dollar business Blackwater used to be, he’s got a big backer in Citic Group Corp., the Chinese government’s largest conglomerate. With China’s stock of direct investment in Africa reaching $25 billion by the end of 2013, much of it in the form of resources-for-infrastructure deals, Prince is counting on demand for his services to surge.

“They can do logistics under fire where other companies wouldn’t want to get involved because of the risks,” said Luke Patey, a senior researcher at the Danish Institute for International Studies. “I think the expertise of a former private military contractor is very useful in this regard.”

Citic Ties

Frontier Services traces its roots to a Chinese digital broadcaster called DVN Holdings, but effectively started anew with Prince’s arrival in January 2014. It’s now a logistics company offering services ranging from risk assessment to airdrops and medical evacuations in Africa, though no guns for hire.

The company’s backers “saw the massive investment coming out of Asia and going into Africa and they thought: How do you make that work better, more effectively?” Prince said. “They wanted to find people who know how to operate and make things happen in difficult places, so I guess they thought of me.”

In its first full year of operations as Frontier Services, the company posted a net loss of HK$130.4 million ($16.8 million) on revenue of HK$310.4 million. The stock has risen 32 percent this year, double the gain in the Hang Seng Index.

Prince said he’s now in talks to deepen cooperation with Citic, Frontier’s largest shareholder, though he declined to elaborate. Calls to Citic Group’s public relations department weren’t answered.

Nisour Square

Tapped for his experience, Prince’s white-collar job is a far cry from his past running one of the world’s largest private security firms. Despite sounding like a seasoned executive at times -- repeatedly noting that “I can’t make forward-looking statements” -- Prince concedes he’s still adjusting to the role.

“I’m new to this public-company thing,” he said. “When the winds of life change, you have to tack with them.”

Prince’s life took a sudden turn in September 2007, when Blackwater guards stopping traffic for a State Department convoy shot and killed 14 unarmed Iraqi civilians during a chaotic scene in Baghdad’s Nisour Square.

For some, the incident made Blackwater an emblem of American militarism and imperialism -- all in the service of profit. One of the Nisour Square guards was sentenced last month to life in prison for murder and three others received 30-year jail terms.

Prince left Blackwater in 2009, sold it the following year and says he’s cut all ties with the company. Academi, as the private security firm is now called, says it has no more ties with Prince.

Blackwater’s demise left Prince bitter with an American government he says he served patriotically -- he was a CIA asset and was on al-Qaeda’s hit list -- only to see himself vilified as a soldier of fortune.

“I was definitely hung out to dry,” Prince said. “It was driven by politics.”

Into Africa

After leaving Blackwater, Prince ventured into private equity by forming Frontier Resources Group, based in Abu Dhabi. He also published a book on Blackwater that may be turned to a movie.

His main focus now is the logistics company, whose contracts include a $23.3 million deal with South Sudan’s Ministry of Petroleum to carry supplies and maintain its oil fields amid the civil war there. Tens of thousands of people have died in the fighting and more than 2 million others have fled their homes after army commanders rebelled against President Salva Kiir.

Frontier Services is “offering this service to a side in a civil war,” Danish researcher Patey said.

Prince says his company is simply “on the side of peace and economic development.”

Frontier Services is betting its future on serving Chinese companies, who Prince says are unprepared to help employees overseas who suffer accidents or violence. One of Frontier Services’s main roles is doing medical evacuations from Africa to mainland China, said Prince, who declined to identify his Chinese clients.

“You take a guy out of the middle of China who has no foreign travel experience and now you put him into a very remote part of Africa -- that is a jump,” Prince said. “We’ll give advice on how to avoid being kidnapped or injured, local diseases or routes to avoid. The more preparation we can help those guys with to be safe and effective and to better interact with the locals, I think both sides win.”