Martin Wichterle issues bonds to fund growth at Wikov Group

Industrialist Martin Wichterle is joining a wave of Czech businessmen raising money from the public through bonds. His Wikov Group is launching a bond programme worth up to 1.5 billion crowns, aiming to raise 750 million crowns in the first round at a yield of 7.75% per year, maturing in October 2030.

The issue prospectus was approved by the Czech National Bank, and the bonds will be placed with retail investors by J&T Banka and Česká spořitelna. The bonds will also be traded on the Prague Stock Exchange. The funds raised will go toward further growth of the group and general corporate needs. They are backed by financial guarantees from the Wikov Group holding company and a pledge of up to 75% of its shares.

Wikov Group specializes in manufacturing gearboxes and equipment for hydroelectric power plants. Last year the company's revenue came to 6.64 billion crowns — split roughly evenly between its gearbox and hydropower divisions — while EBITDA reached 625 million crowns. The group's total debt stands at 1.57 billion crowns.

Martin Wichterle is a prominent figure on the Czech business scene and an active public advocate for business interests in discussions with politicians. His grandfather was Otto Wichterle, the inventor of contact lenses. In business, Martin carries on his ancestor's legacy, who founded the firm Wichterle & Kovařík in Prostějov in 1918. The brand was revived in 2002 after the purchase of the ČKD Hronov plant, and today the group operates in, among other places, Germany, Slovenia, Canada and India. His portfolio also includes the well-known glassworks Rückl and Bomma.

Bonds are currently in fashion among major Czech entrepreneurs. In August, for instance, the fund Pale Fire Capital of Dušan Šenkýpl and Jan Barta offered bonds worth 750 million crowns, with the option to increase the issue to 1.5 billion, at a yield of 7.25% — they were snapped up almost instantly. Jiří Šmejc has also recently turned to this market for funding, and companies from the PPF group and Michal Strnad's CSG are active here too.