The ČMZRB Group, in the cooperation with the Ministry of Industry and Trade, has published a call under the program Venture Capital – IPO Fund. It will allow ČMZRB to support SMEs in the form of capital inputs for the first time in its history. The ČMZRB Group will buy shares of companies issued in the START market of the Prague Stock Exchange, but only as a minority shareholder with 30% of shares at maximum. The programme is funded by the Operational Program Enterprise and Innovations for Competitiveness (OP EIC), aiming to mobilize private resources and support investment into the capital of SMEs.
Currently, the START market, operated by the Prague Stock Exchange and designed mainly for SMEs, is the only multilateral trading facility in the market cooperating with ČMZRB. An SME that wishes a part of its shares issued in the START market to be bought by the ČMZRB Group may apply for the IPO fund support through an application available on the website of ČMZRB subsidiary – ČMZRB investiční, or on the website of the Prague Stock Exchange. Receipt of applications to the Risk Capital – IPO Fund program will be open from 1st February 2021 to 30th June 2023.
ČMZRB investiční manages the IPO Fund for the Ministry of Industry and Trade. The instrument is funded by the Operational Program Enterprise and Innovations for Competitiveness (OP EIC). The amount of CZK 330 million has been allocated from the European Structural and Investment Funds.
“I believe that the IPO Fund initiative will bring a fresh wind to trading of the shares of small and medium-sized enterprises in the Czech Republic and will help to open up new opportunities for entrepreneurs to raise capital in the current difficult times. If the program is successful, we are ready to continue in this form of support”,says Marian Piecha, Deputy Minister of Industry and Trade for EU Funds.
All received applications will be assessed by the three-member Board of Directors of ČMZRB investiční who will decide on the acquisition of individual shares/stakes. “If the company meets the conditions of the program and its requirement is in line with the investment strategy, the Board of Directors will decide on the purchase of shares up to 30% of the total issue, with a minimum IPO investment of CZK 3 million and a maximum of CZK 50 million.” says Jiri Jirasek, Chairman and CEO of ČMZRB, adding: “Given the capacity of the program CZK 330 million, we expect that we could support around 10 small and medium-sized enterprises.” The estimated time of investment is four years, then will ČMZRB investiční respond to the market demand.
The financial support in a form of capital inflows will be available to issuers meeting the definition of a small and medium-sized enterprise, which are also joint-stock companies with a permanent place of business in the Czech Republic but outside Prague. The public subscription of shares represents an interesting chance to raise capital for further development of Czech companies.
“Thanks to the START market, Czech small and medium-sized companies have been able to use the capital market for their financing since 2017. We welcome another potential source of investment capital. The investment of a state entity can bring greater credibility and thus motivate other private investors to buy shares issued by small and medium-sized enterprises, ” says Petr Koblic, CEO of the Prague Stock Exchange.
ČMZRB has long focused on supporting small and medium-sized enterprises in the form of guarantees and loans. It started with support in the form of capital inflows in 2018 through the Central European Fund of Funds, where it acts as an investor in the fund of funds of the European Investment Fund. The IPO Fund will be the first program where it will purchase minority shares in small and medium-sized companies directly through its investment subsidiary ČMZRB