UPDATE 1-Czech brewer Lobkowicz seeks $50 mln for growth via IPO
* To offer 5.7 million new, existing shares
* Share sale represents 48.77 percent of firm
* To hold off on dividend payments as it aims to grow
* Looking at acquisition, investments into distribution (Adds CEO, comments on dividend, sales, proceeds)
By Jason Hovet
PRAGUE, May 12 (Reuters) - Czech brewer Lobkowicz aims to raise nearly 1 billion crowns ($50.24 million) through an initial public offering to fund growth via acquisitions and exports as consumption in the world's biggest beer drinking market falls.
The Czech Republic, home of the original Pilsner lager, has the highest per-capita annual beer consumption rate in the world at 144 litres, but the level is down since the global economic crisis of 2008-09.
In what would be Prague's first share issue in three years, Lobkowicz said it would offer up to 5.7 million shares, including 2.3 million new ones, representing a 48.77 percent stake in the country's fifth biggest brewer.
The group said it wanted to use 100 million crowns of the proceeds to buy another brewery with annual output of 80,000 to 100,000 hectolitres, but declined to give more details. It also wants to grow its distribution network in the restaurant sector.
Lobkowicz produced 854,000 hectolitres of beer in 2013 and posted a net loss of 73.8 million crowns on flat revenue of 1.2 billion crowns, of which a fifth came from exports, according to its IPO prospectus.
Several Czech beer producers have tried to raise exports to make up for lost domestic sales. The Czech beer market is dominated by Pilsner Urquell lager maker Plzensky Prazdroj, which is a unit of SABMiller, Staropramen - owned by Molson Coors - and local units of Heineken.
Chief Executive Zdenek Radil said the company planned to reinvest profit into growth in the next two years, forgoing a dividend. Sales were up 3 percent in the first quarter, he said.
"We expect relatively dynamic growth in the next two years. After two years we are planning a dividend payout of around 40-70 percent of profit," he said.
Lobkowicz, owner of seven Czech breweries which have a 4-5 percent total share of the domestic market, will offer shares in the Czech Republic and neighbouring Austria. It will list shares in Prague, with trading expected to start on May 28.
The maximum price for retail investors has been set at 175 crowns per share. That price would value the entire offer at 997.5 million crowns, or about 36.4 million euros.
"The sector is quite interesting for Czech investors," Komercni Banka analyst Miroslav Frayer said, but added: "On the other hand it is small and I would worry about the liquidity. It will be one of the smallest companies on the market."
Lobkowicz plans to finish bookbuilding on May 22 and has an over-allotment option of 855,000 shares. Austria's Erste Bank Group and its Czech unit Ceska Sporitelna are managers.
After the IPO, Lobkowicz's biggest shareholder, Czech investor Martin Burda, will see his stake fall to 32.3 percent from 55 percent. The stake of the second biggest shareholder, Grzegorz Hota, will drop by half to 15.9 percent.
The operation would be a boon for the moribund Prague Stock Exchange, which last saw a new share issue in 2011 when Czech energy firm E4U carried out the bourse's smallest-ever offering to raise 94 million crowns. ($1 = 19.9055 Czech Crowns) (Editing by Sophie Walker)