The aim of the project is to establish a commercially managed, private equity fund operating in the Czech Republic. The fund will have a regional focus, concentrating mainly on the country's primary industrial regions.
The fund will provide start-up capital for small companies which do not have access to long-term capital through banks or foreign partners. It will expand on the activities of the RPF, which has developed a strong pipeline of projects in an area considered to be economically depressed and unattractive for private sector investment.
The fund will contribute to the development of the private sector and the economic growth of industrial regions in the Czech Republic by: (i) carefully selecting enterprises with strong prospects in the private sector or in the process of privatisation; (ii) providing equity financing, thereby attracting additional funds from banks and other investors; and (iii) advising the companies in which the fund has invested and helping them to improve their performance.
The Czech private equity fund, L.P, is a limited partnership to be established under the laws of Guernsey for the purpose of making equity and equity-related investments in companies in the Czech Republic. The fund will expand the investment activities originally developed by Regionalni Podnikatelsky Fond s.r.o. (RPF), a regional fund located in the Ostrava region of the Czech Republic. The fund will be managed by Czech Venture Partners, an affiliate of Baring Private Equity Partners.
The EBRD is subscribing to ECU 7.5 million of the share capital of the fund. The other major initial investors are ING Group and Ceskoslovenska Obchodni Banka.
The fund will have a maximum target for all subscriptions of ECU 40 million. It is scheduled to have its first closing at a smaller amount in mid-1997. The sponsors may accept additional subscriptions up to the maximum of ECU 40 million for a further six months following the initial closing.
The fund will follow the EBRD's Environmental Procedures for Investment Funds. In implementing these procedures, the fund will assess potential environmental issues associated with its investments, all of which are required to comply, at a minimum, with local/national health safety and environmental standards, regulations and public consultation requirements.
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