Czech arms maker Colt CZ plans Euronext Amsterdam debut

Prague, March 10 (CTK) - Czech arms manufacturer Colt CZ intends to enter the Euronext Amsterdam stock exchange and will ask shareholders for their approval of this move, the company said in a press release today, adding that it plans to use the proceeds from the capital increase for investments or acquisitions.

The shares of Colt CZ (until 2022 CZG - Ceska zbrojovka) have been traded on the Prague Stock Exchange since 2020. Its largest shareholder is Ceska zbrojovka Partners SE.

"This marks an important step for Colt CZ as we seek shareholder approval for our proposed dual listing on Euronext Amsterdam and capital increase," said group head Radek Musil. According to the company, the aim of the dual listing is to increase visibility among the global investor community and enhance the liquidity of the shares.

The group did not specify the expected date of listing on Euronext Amsterdam. According to Colt, in addition to shareholder approval, certain customary requirements must also be met. The arms manufacturer's securities will then be traded in Prague and Amsterdam and will be fully fungible between the two exchanges. Depending on market conditions, the capital increase could happen as early as the first half of this year, the group said.

Colt CZ wants to follow the same path as CSG, another Czech arms maker that was listed on the Amsterdam stock exchange at the end of January, XTB analyst Tomas Cverna told CTK. According to him, Colt's motivation is to participate in the interest of institutions and small investors in investments in the defence sector and thus obtain money for further expansion.

"Although CSG's share subscription was very successful, the situation may be different in the case of Colt CZ. CSG's valuation at the time of subscription was mainly driven by the outlook for demand from Ukraine for large-caliber ammunition. Given that Colt CZ operates in a less attractive sector, this may affect its valuation at the time of subscription," Cverna added.

In 2021, CZG - Ceska zbrojovka Group SE acquired American arms manufacturer Colt. The following year, it changed its name to Colt CZ. Another significant acquisition was the purchase of Czech ammunition manufacturer Sellier & Bellot for the equivalent of over CZK7.8bn and a new issue of Colt CZ ordinary shares. Early this year, the group completed the acquisition of a 51 percent stake in Czech nitrocellulose manufacturer Synthesia Nitrocellulose and in the energy division Synthesia Power. After deducting the debts of Synthesia Nitrocellulose, the transaction amounted to CZK10bn.

According to today's press release, the arms maker has ambitions for further growth. The proceeds from the capital increase may be used for further acquisitions of manufacturers and strategic investments in technological modernisation, increasing production capacity, or boosting research and development. The group said that the proceeds could also be used, for example, for personnel and organisational strengthening or to partially reduce its existing debt.

Colt CZ is based in Czechia and employs approximately 4,500 people at its manufacturing facilities in the Czech Republic, the United States, Canada, Sweden, Switzerland and Hungary. It manufactures firearms, ammunition and energy nitrocellulose. It sells its products primarily under the Colt, CZ (Ceska zbrojovka), Colt Canada, Colt Optics, Dan Wesson, Sellier & Bellot, swissAA, Spuhr and 4M Tactical brands.

According to media reports, Ceska zbrojovka Partners SE, the main shareholder of the Colt CZ group, is controlled by Rene Holecek, who is ranked among the richest Czechs. Last year, for example, he ranked 19th in Forbes magazine's list with a fortune of CZK25bn.

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