The Czech-Moravian Guarantee and Development Bank signed an agreement with the Prague Stock Exchange. ČMZRB will support small and medium-sized enterprises through equity instruments. Concretely, it will create “IPO fund”, through which it will enter the START market and become one of investors on the Czech stock market.
IPO fund will be managed by ČMZRB Investments, one of the two bank´s subsidiary companies. This company was established in 2019 with the aim to enrich the current product portfolio of the Bank with equity instruments. IPO fund aims to improve the access of Czech SMEs to equity financing through initial public offering of their shares to investors. The fund is worth of CZK 330 million (app. EUR 12.5 million) and is financed from the Operational Programme Enterprise and Innovation for Competitiveness, which is managed by the Ministry of Industry and Trade.
SMEs offering their shares through IPO emission on the START market and fulfilling all the conditions of the “IPO fund” program will be eligible to apply. CMZRB Investments will buy up to 30% of the shares in order to trigger complementary private investment.
“While equity support for SMEs is a standard tool in other countries, there is only little experience with it in the Czech Republic,” says Jiří Jirásek, Chairman of the Board of Directors of the ČMZRB. “When we will buy shares of the companies through the IPO fund, we will motivate other private investors to do so as well. This will help to further develop the whole START market. Who will benefit, is quite clear – SMEs with high growth potential seeking additional financing through IPO emissions.”
“We really appreciate that the Czech-Moravian Guarantee and Development Bank will join our successful START program for SMEs. Any new source of investment capital is highly welcomed. Moreover, the bank has a profound experience with financing SMEs,” asserts Petr Koblic, General Director of the Prague Stock Exchange, and adds: “Being the President of the Federation of European Securities Exchanges (FESE), I know that equity support for SMEs is a high priority for the new European Commission. I am convinced that our cooperation with the ČMZRB will be soon followed by an enormous rise in equity support for SMEs across our part of Europe.”
ČMZRB Investments announced the call for multilateral trading platforms in September 2020. Prague Stock Exchange was the first one to apply. However, the call is open until the end of July 2023 and other operators of such platforms may join our “IPO Fund” programme.