Leo Express is about to fund its development projects through bonds at a quite attractive interest rate

Just a few minutes ago, the Czech National Bank approved an application filed by the private railway transporter Leo Express, to issue CZK 550m worth of bonds. The company controlled by businessman Leoš Novotný (27) is launching its securities on the retail market, alluring investors with a 7.5% annual interest over the 5-year period to maturity. The issue arrangers are J&T Banka and Raiffeisenbank. For J&T, it will be one more item ticked off on its list of bond issues lately managed for companies owned by Czech and/or Slovak business people.

In the middle of November, Leo Express started to operate modern Swiss trains on the Prague-Ostrava line, thus becoming a direct competitor of both České dráhy (Czech National Railways) and Radim Jančura’s RegioJet. The company intends to pursue its expansion in the freshly liberalized market, first on a number of key Czech railway lines, and in other CEE countries later on. The company’s trains have been running in trial mode, with only two to-and-fro trains per day between Prague and Ostrava, for which time slots were allocated outside rush hours. These departure times didn’t prevent about four thousand passengers from taking Leo Express trains over the first week. Leo Express expects privately owned passenger railway transportation to develop with the same dynamism as passenger air traffic did in the 1990s: in the Czech Republic, private companies now hold a 40% share in the latter segment.

Leo Express will start its full operation on 9 December, the new timetable’s effective date. Eight black-and-golden sets of carriages of the Novotný’s fleet will circulate every day between Prague and Bohumín (to where the line is to be extended from Ostrava). The company intends to use the funds raised through bonds for acquiring more trains. Demand for its securities is expected to be pretty high, as the company enjoys the trust of several noteworthy investors, such as Třinec-based Martin “Banana” Burda. However, whether or not any of them will purchase the company’s bonds remains to be seen yet.
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Translated by Lingvus

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