RPT-Property firm ECM seeks 95 mln euros in IPO

(Repeats story published late on Thursday)

By Jan Korselt

PRAGUE, Nov 29 (Reuters) - Czech developer ECM Real Estate Investments is looking to raise about 95 million euros through an initial public offering due to be completed by Dec. 5, the company said on Wednesday.

Including a 10 percent over-allotment option, the deal would give company market capitalisation of 212 million euros, according to Reuters calculations, making it the smallest stock on the Prague exchange's main market when it starts trading on Dec. 11.

Capitalising on rising real estate market in the fast-growing new EU member country, the firm is offering 1.275 million new shares with maximum price set at 55 euros per share, plus the over-allotment option.

The firm's current owner, Chief Executive Milan Janku, will offer an additional 315,000 existing shares in the IPO.

"We think this is the optimum form of obtaining means to build a land-bank, meaning a reserve of interesting projects or plots," Janku said.

Janku said 65 million of the IPO proceeds would go to the company to finance its expansion in the Czech Republic and Russia.

Combined with the sale of the existing shares, the company's free float will be 44 percent after the transaction.

ECM, among other projects, is re-developing a 109 metre, 27-storey office building in Prague's office district, the highest building in the country.

Analysts expect the market to receive the issue well and there should be should be enough demand.

"The IPO pricing suggests that the stock could have a certain room to grow towards what our estimates show could be the target price," said Patria Finance analyst Tomas Gatek.

ECM will also list 1.728 million warrants issued earlier this year to seven holders of its bonds, Janku said.

He said he would buy some of the warrants in addition to some he already holds. The warrants give the holder the right to buy ECM stock at 22.22 euros.

There will be a 180-day lock-up period which will prevent holders of the warrants from exercising their option for new shares and Janku from selling more of his stake.

Janku said the company portfolio was valued at 240 million euros in an independent appraisal and that he expected it to rise to 700 million in 2009.

The offering, the second ever IPO on the Prague market, will make ECM the second real estate firm on the market besides developer Orco Property Group <ORCO.sp.PR> <ORCO.PA>.

The company plans to pay no dividends for 2006 and 2007.

ECM had first-half 2006 profit of 16.66 million euros, up from 11.69 a year ago.

The sole global coordinator, bookrunner and lead manager of the IPO is CA IB, an investment banking unit of Unicredit Group <CRDI.MI>. Austria's Erste Bank <ERST.VI> is co-lead manager. ((Writing by Jan Lopatka, editing by Edmund Klamann, Paul Bolding; prague.newsroom@reuters.com; Reuters Messaging: jan.lopatka.reuters.com@reuters.net; +420-224 190 474))

Keywords: ECM IPO/