Prague - Shares of Czech brewery Pivovary Lobkowicz began to be traded on the Prague Stock Exchange (BCPP) today, with the starting price of the stock being set at Kc160 per unit within the subscription, according to information released at a press conference held after the start of trading.
Slavnostním úderem na IPO zvon a naražením dobového sudu s pivem zahájil 28. května v Praze generální ředitel Pivovaru Lobkowicz Zdeněk Radil zahájení obchodování s emisí Pivovary Lobkowicz Group. ČTK Vondrouš Roman
Pivovary Lobkowicz is the only brewery on the BCPP. Its shares grew to about Kc163 shortly after the trading started.
The total value of the issued shares is Kc1.87bn on the day of the listing. The local manager of the issue is the Ceska sporitelna bank.
Pivovary Lobkowicz said a week ago it had sold 2.53 million shares, including an above-limit option, for almost Kc405m within the initial public offering (IPO).
Originally, the IPO was to include 3.4 million shares of the existing shareholders, but the shareholders decided to keep most of their securities for the time being.
Apart from Czech investors, the stocks were bought also by investors from Austria, Poland, Hungary and Slovakia.
The trading was today officially launched by Pivovary Lobkowicz CEO and board of directors chairman Zdenek Radil, who tapped a wooden beer barrel and rang the IPO bell at the stock exchange.
The listing of Pivovary Lobkowicz's shares on the BCPP, enabling trading in beer as the most traditional Czech product, is an important step for the bourse, BCPP chief executive Petr Koblic said.
In the 1990s, shares of other large breweries were traded on the Prague bourse, but during the coupon privatisation they were sold to multinational corporations by semi-state funds which mostly owned them.
Three out of the five biggest brewers in the Czech Republic are part of large foreign groups. Beside Pivovary Lobkowicz, the second brewer with Czech ownership is Budejovicky Budvar, which is controlled by the state.
Pivovary Lobkowicz said it was pleasantly surprised by demand for its shares.
"We had to reduce orders by tens of percent, so nobody received the number of shares they originally wanted to buy," Radil told CTK today.
This should lead to the growth of the shares' price, Radil said.
By 12:30, shares worth over Kc11m had been traded on the bourse. The stock's price grew by 1.44 percent to Kc162.30 in the morning.
Pivovary Lobkowicz has raised a sufficient amount of money for its further development thanks to the share issue, according to Radil.
"We have already started to develop and implement our growth plans, which include a growth in the barrel segment of the Czech beer market," Radil said.
In the near future, the company wants to invest in the acquisition of about one hundred new restaurants and pubs, which should start to sell its beer instead of rivals' products, he added.
The group said earlier it wants to use up to Kc200m from the income from the issue for an investment in expanding its distribution network and in acquisition of new clients among restaurants and pubs.
The company will also use about Kc100m from the income to finance an acquisition of an unnamed brewery. It wants to complete the transaction, that has already been agreed on, by the end of this year.
Pivovary Lobkowicz will also use the money to increase its penetration on markets abroad, above all in Slovakia, Russia and other countries of the former Soviet Union.
Pivovary Lobkowicz, comprising seven breweries, is the fifth biggest beer producer in the Czech Republic.
The Pivovary Lobkowicz group raised sales to Kc1.159bn last year from Kc1.157bn in 2012. But its beer output dropped by 1.5 percent to 854,000 hectolitres in 2013.
This year, the group's beer output has been increasing. It rose by 9.5 percent year-on-year to 273,000 hectolitres in January-April.