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AAA Auto says it plans 2007 initial public offering

AAA Auto AS, the largest second-hand car dealership in central Europe, said it plans to sell shares to the public sometime next year to finance expansion in countries such as Poland.

AAA Auto AS spokesman Vladimir Bystrov confirmed the plan, after Bloomberg cited three people close to the Czech company in a report earlier today on the IPO. Bystrov, the strategic planning director at Bison & Rose, a public relations agency hired by AAA, spoke in a phone interview after the initial report was published. The shares may trade on the Prague and Warsaw bourses, he said. An initial offering by AAA Auto would be the fourth ever on the Prague stock exchange, following sales this year by ECM Real Estate Investments SA and Pegas Nonwovens SA, a fabric producer. The first public share sale in the former communist country was by Zentiva NV, a drugmaker, in July 2004. „I see new IPOs as positive because the more companies go to the market, the wider opportunities there are to diversify investments,” said Barbara Seidlova, an analyst at ING Wholesale Banking in London. „Many owners seek listings in both Prague and Warsaw because they see the prospect of better liquidity and higher valuations. It doesn't cost much more and makes sense.”

The Prague Stock Exchange's main trading system, so called SPAD, currently has 11 companies. Most of the companies traded by the bourse became public following the country's voucher privatization in early 1990s. At least three other Czech companies, including coal company New World Resources, have announced plans to offer shares to investors as they want to expand in central Europe. KBC Groep NV's Czech unit, Patria Finance, will arrange the AAA Auto stock offer, and White & Case LLP was chosen as the legal adviser, Bystrov said. „We have a number of proposals but so far there is no set timetable of the sale,” Bystrov said. He said the arrangers of the sale will propose next month the best timing and parameters of the offer. Then the company will release the details, he said. Prague-based AAA Auto had 2,100 employees last year and revenue of 8 billion koruna ($384 million), an increase of 6.3% from 2005, according to the company's Web site.

AAA Auto is fully owned by Anthony James Denny, an Australian expatriate living in Prague, the Web site shows. Denny started the business in Prague in 1994 and later opened outlets in the country's other main cities. Last year, AAA started operations in neighboring Slovakia and in Bucharest. It entered the Hungarian and Polish markets this year. Bystrov said the IPO could help the company to became the largest second-hand car dealer in markets where it currently has larger rivals, such as in Poland. AAA is the biggest on the home market and in Slovakia and Hungary, he said. (Bloomberg)