UPDATE 3-ECM Real Estate plans Prague IPO to fund expansion

(Writes through with more quotes from CEO, background)

By Marek Petrus

PRAGUE, Nov 14 (Reuters) - Property developer ECM Real Estate Investments unveiled a plan on Tuesday to float its shares on the Prague Stock Exchange, a move that promises to give a further boost to the Czech Republic's main bourse.

Milan Janku, chief executive officer at ECM, told Reuters in an interview that the Luxembourg-registered company is looking to publish the indicative price range for its planned initial public offering (IPO) by early next month.

He said the share offering -- only the second IPO ever on the second biggest central European exchange with market capitalisation of some $60 billion -- will boost the firm's capital to aid expansion plans in the Czech Republic and Russia.

"Within 10 to 14 days we will know more, both from the point of view of the size of the issue and the valuation of the company ... Consequently, some valuation range will be created and presented to potential investors," he said in his first interview since announcing the IPO plan earlier in the day.

He said the IPO is aimed at both domestic and foreign institutional investors, as well as Czech retail investors.

Janku declined to reveal how many shares could be offered, but said he wanted to keep majority control over the company, which he fully owns. ECM had 46 million euros ($58.98 million) in equity and 132.5 million euros in total assets at end-2005.

ECM, founded in 1991, is one of the biggest property developers in the Czech Republic, with its portfolio geared towards selected investment in the capital Prague, main regional centres and luxurious residential buildings.

Last month, it presented a plan to spend 100 million euros ($128.6 million) on a shopping mall in Russia, and Janku said two other projects for investment in Russian shopping and office property were in the pipeline.

"SMALL NUMBER OF SHARES"

The Prague exchange has daily turnover of some $150 million and a well-functioning trading platform, based on the activity of market makers for individual stocks but its sole IPO has been the share floatation by drug maker Zentiva <ZNTVsp.PR> in 2004.

Analysts expect ECM to tap strong investor interest for the property sector in central and eastern Europe, where fast economic growth has fed a construction boom and demand for both office and residential property.

Janku said ECM would like to repeat the success of Zentiva, whose shares have risen nearly 150 percent since it went public.

Another benchmark is real estate company Orco <ORCO.PA> <ORCOsp.PR> which listed shares in Prague alongside its home Paris Euronext market and whose shares have more than doubled in price since it joined Prague in February 2005.

"The Prague bourse is interesting because the liquidity there is not being diluted among hundreds or even thousands of shares but is focusing on a small number of main shares," said Janku.

"This I think is very attractive for new issuers and I hope that it will also be attractive for us ... We could see the benefits of this on the liquidity of Orco shares," he added.

The sole global coordinator of ECM's offering is CA IB, an investment banking unit of Unicredit Group <CRDI.MI>. Austria's Erste Bank <ERST.VI> is co-lead manager. ((Editing by ;

prague.newsroom@reuters.com;

Reuters Messaging: alan.crosby.reuters.com@reuters.net;

tel: +420 224 190 477)) ($1=.7799 Euro)

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Keywords: PROPERTY CZECH ECM