Tue, Jun
50 New Articles

Deal 5: CMZRB CEO Martin Potucek on IPO Fund Launch

Deal 5: CMZRB CEO Martin Potucek on IPO Fund Launch

Czech Republic
  • Smaller Small Medium Big Bigger
  • Default Helvetica Segoe Georgia Times

On January 29, 2020, CEE Legal Matters reported that BBH had advised the Czech-Moravian Development Bank on the launch of its IPO Fund and signing of a cooperation agreement with the Prague Stock Exchange to support new entities wishing to list on its START market. CEEIHM spoke with Martin Potucek, Chief Executive Officer at Czech-Moravian Development Bank, to learn more about the matter.

CEEIHM: First of all, congratulations on the establishment of your IPO fund. Why did the Czech-Moravian Development Bank set this up?

Martin: Czech-Moravian Guarantee and Development Bank (CMZRB) is the national development bank and its mission is to help the development of small and medium-sized entrepreneurship (SME) using financial resources from national or EU funds for guarantees, loans, or equity financial instruments. It is 100 % owned by the State. The IPO Fund will be set-up by the Ministry of Trade and Industry within the framework of ESIF (European Structural and Investment Funds). CMZRB Investicni, a.s. (a subsidiary of CMZRB) will act as the fund manager. The IPO Fund will be an investment fund with the only objective of investing directly in eligible SME's IPOs on selected Multilateral Trading Facilities (“MTF”).

CEEIHM: What does the cooperation agreement with the Prague Stock Exchange entail exactly?

Martin: The investment by the IPO Fund will be carried out through MTFs according to §69 of Act No. 256/2004 Coll. and pursuant to Article 4 (1) (22) of Directive 2014/65/EU10 (“MIFID”), aimed, in whole or in part, at trading stakes issued by SMEs. Participating MTFs are chosen through a transparent call, open to all interested operators of the regulated market and to dealers in securities that comply with the constraints imposed by Czech and European Union legislation and that fulfill the conditions laid down in the investment strategy of the Fund. The cooperation agreement declares that the Prague Stock Exchange START market fulfills the conditions for MTF, information sharing, and a technical solution of IPO (IPO Fund investment can reach a maximum of 30% of the issued stock).

CEEIHM: What are the main benefits of turning to the START market over others and why did you decide to have your fund target listings on it?

Martin: The reason was described in answer #2. The IPO Fund is open for any MTF which fulfills the conditions. However, only the Prague Stock Exchange has signed up for the program for now.

CEEIHM: What would you say were the more complex aspects, from a legal perspective, on setting up the fund and the cooperation agreement, and how was the legal work split between your in-house legal team and your external adviser?

Martin: We found the most difficult part was to link legal aspects of investment market rules (equality of investors) and ESIF programs. The Fund is open to all issuers that comply with the conditions of the Program They declare to meet the conditions in the investment contract and false information is subject to sanctions. The investment contract is available for private investors before an IPO to see all conditions and risks for the public investor. BBH came up with the whole scheme of the investment process for us, including the investment contract.

CEEIHM: Why did you choose to turn to BBH in particular for this project?

Martin: CMZRB is a public entity. It was thus necessary to make a selection procedure and BBH was selected as having the best offer (looking at their experience and factoring in price).

Originally reported by CEE In-House Matters.

Czech Republic Knowledge Partner

HAVEL & PARTNERS, attorneys-at-law, with offices in Prague, Brno, Bratislava, Pilsen, Olomouc, and Ostrava, has a team of 220 lawyers, tax advisors and 500 employees in total, is the largest independent law firm in Central Europe.

Our clients include large international companies, leading Czech and Slovak firms, including strategic state-owned companies and public sector authorities, as well as medium-size businesses, individual entrepreneurs, and investors. We advise approximately 100 of the Fortune 500 companies, and almost 50 of the Czech Top 100 companies. HAVEL & PARTNERS currently provides its services to a total of 2,000 clients. We have the most comprehensive international support available to both Czech and Slovak law firms. We provide legal and tax advice in 12 world languages in more than 90 countries around the globe. Up to 70 % of the transactions we deal with involve an international aspect.

HAVEL & PARTNERS was named the best law firm operating in the Czech Republic by the prestigious British rating agencies Chambers and Partners (2020) and Who’s Who Legal (2018, 2019). It is also the most successful law firm, providing the most comprehensive legal services in the Czech Republic and Slovakia, based on the total number of all nominations and awards in all years of the Law Firm of the Year awards. The firm became the absolute winner of this competition four times in the last six years, receiving the main award Domestic Law Firm of the Year in the Czech Republic (2015, 2017, 2018, 2020) and ranking as one of the most recommended law firms in all categories of law. Our company is also a three-time winner of the Law Firm of the Year award for Best Client Services (2015, 2016, 2019). In the field of M&A, HAVEL & PARTNERS is the best law firm in the Czech Republic based on the annual International Advisory Experts awards (2018, 2019). In Slovakia, it also won the prestigious global M&A Today Awards (2013–2018) for Mergers & Acquisitions six times in a row, and repeatedly won first place in the ranking by Lawyer International Legal 100 (2017, 2018). Prestigious international rating agencies EMIS DealWatch and Mergermarket have ranked HAVEL & PARTNERS among the leading law firms by the number of transactions completed in the entire CEE region since 2009. Based on annual awards of the Acquisition International magazine, HAVEL & PARTNERS has become the Law Firm of the Year 2019 in the M&A category in the CEE region.

Firm's website: https://www.havelpartners.cz/en/

Our Latest Issue