UDI Group plans to list shares this autumn on the Prague Stock Exchange’s new Start market which aims to encourage investment in small and mid-sized companies. In October, the Czech developer hopes to raise CZK 300 million through an initial public offering (IPO).
The START market offers SMEs a way to raise capital directly from investors under simplified terms. Generally, regulated markets are all but inaccessible for smaller businesses due to administration and other costs, so they generally turn to banks for loans.
UDI Group will list shares in a newly formed subsidiary called UDI CEE, short for central and eastern Europe, the market where it now plans projects worth CZK 1 billion. The parent company plans to offer shares amounting to about 30 per cent of UDI CEE on the Prague bourse. In the first tranche, it hopes to raise CZK 300 million and gradually the entire CZK 1 billion.
"As a developer, we use standard forms of financing, such as bank loans and subordinated loans or capital from domestic and foreign financial investors,” UDI Group Finance Director Libor Táborský told the Czech News Agency. “We decided to try out the Start platform as another financing tool as part of our continued expansion abroad.”
UDI – which is short for Urban Developers and Investors – has been operating on the Czech and Slovak markets for more than 25 years. It was founded by a father-son team that initially concentrated on building and selling family homes and residential apartment buildings but soon expanded into the commercial sector.
Its strategic partners for UDI CEE projects include members of Fidurock Capital, a Dutch investment boutique.