CEE Legal Matters

Author: admin

  • Kinstellar and A&O Advise on NET4GAS on Capital Structure Refinancing

    Kinstellar and Allen & Overy, among others, have advised on NET4GAS’s optimization of its capital structure, including corporate bonds and bank loans amounting to approximately EUR 1.12 billion. 

    The refinancing follows the acquisition of NET4GAS, the Czech gas transmission system operator, by Allianz Capital Partners and Borealis Infrastructure Management, which was the largest M&A transaction in the energy sector in the Czech Republic in 2013. According to Allen & Overy, “given the nature of the issuer and borrower – NET4GAS – this deal is truly innovative and very specific and demanding because it required, among other things, particular focus on and attention to the regulatory and public procurement aspects, which led to a number of unprecedented complexities.”

    Allen & Overy advised Barclays Bank PLC, BNP Paribas, Ceskoslovenska obchodni banka, Citigroup Global Markets Limited, Credit Agricole Corporate and Investment Bank, Erste Group Bank AG, Komercni banka, Merrill Lynch International, Societe Generale, The Royal Bank of Scotland plc, and UniCredit Bank AG, in their capacity as the dealers, and Citicorp Trustee Company Limited as the trustee, in connection with the establishment of the EUR 5 billion Euro Medium Term Note Program by NET4GAS and the inaugural issuances of EUR 300 million 2.5% fixed rate notes, EUR 160 million 3.5% fixed rate notes and CZK 7 billion 2.25% fixed rate notes (Kinstellar states that this represents the “largest corporate bond issuance denominated in Czech crowns in the history of the Czech Republic”) under that program. The A&O team also advised Bank of America Merrill Lynch International, BNP Paribas, Ceska sporitelna, Ceskoslovenska obchodni banka, Citibank Europe, Credit Agricole Corporate and Investment Bank, Export Development Canada, ING Bank, KFW IPEX BANK, and UniCredit Bank Czech Republic and Slovakia, in their capacity as lenders, and Ceska sporitelna, as the agent, in connection with various loan facilities and related financing arrangements entered into with NET4GAS.

    According to an A&O statement, “by virtue of this deal NET4GAS group has successfully replaced the amount of acquisition debt, which resulted from the change in ownership in 2013, by a less expensive and more transparent long-term capital structure.” 

    The A&O team is being led by London-based Banking Partner Conrad Andersen and International Capital Markets Partners Parya Badie and Tim Conduit, with support from a Prague team consisting of Counsel Robert David and Associates Silvie Horackova, Petra Mysakova, and Petr Vybiral.

    Other advisors on the refinancing included BNP Paribas as financial advisor and Linklaters and Arthur Cox as legal advisors.

    Editorial Note: Several weeks after this article was originally published, Linklaters announced that its team on this matter included Partners Ian Andrews and Mark Nuttall and Managing Associates Alexander Shopov and Ilia Ditiatev.

     

  • GC Best Practices Handbook is Out Now!

    General Counsel have stressful jobs. They are expected to be managers, advisors, administrators, supervisors, consultants, and HR experts, among other things — all while trying to find the time to do the legal work that is theoretically their primary responsibility.

     

    And their challenging roles require not only legal expertise, but also business/industry understanding, risk assessment skills, and management knowledge. Keeping all those plates spinning would be difficult even when those lawyers are in regular communication with one another to exchange ideas, information, and best practices.

    But, all too often, they are not. Instead, being a General Counsel or Head of Legal is often an insular job, with far fewer opportunities for communication and exchange of information with peers than senior lawyers in private practice enjoy. Accordingly, and in response to dozens of requests for the information, the Editors of CEE Legal Matters have — in consultation with an elite Advisory Panel consisting of General Counsel from some of the biggest companies in the world — created the 2014 CEE Corporate Counsel Best Practices Handbook, to rave reviews. The Handbook, which was based on a survey prepared in consultation with the Advisory Panel to guarantee that the results would be topical, relevant, and informative, contains the committed responses of almost 700 General Counsel and Heads of Legal across Central and Eastern Europe. The participants were asked about subjects as diverse as hiring/recruiting, time management, external counsel management, communication and managerial styles, and much more. 

    The size of the response alone is evidence of the thirst among senior in-house lawyers for information about their peers, about their performance, and about their choices. And the initial feedback from the few who have seen the final report before its publication was overwhelmingly positive. 

    The Handbook was sponsored by Edwards Wildman, Freshfields, CMS, Tuca Zbarcea & Asociatii, and Stratula Mocanu & Asociatii. Go get it now — you’ll be glad you did. 

  • EBRD Participates in Electrica’s EUR 444 Million Romanian IPO

    The EBRD has participated in the Initial Public Offering organized by Electrica SA, for the issuance of new shares representing 105 per cent of the company’s share capital and floated on the Bucharest Stock Exchange as well as on the London Stock Exchange, via Global Depository Receipts (“GDRs”).

    According to an EBRD press release, the proceeds will be used by Electrica to, “fund an investment plan targeting the development of the distribution network through the installation of smart grid infrastructure, improving operating efficiencies and refurbishing its existing network infrastructure.” The Bank participated with EUR 75 million of the total IPO value of EUR 444 million. The EBRD now holds approximately 8.6 per cent of the company.

    Electrica S.A. is the holding company of a group which distributes and supplies electricity to residential and industrial consumers in the geographical area of Northern Muntenia, and Northern and Southern Transylvania. The Bank also helped the  company draw up a corporate governance action plan, setting out robust risk assessment and mitigation measures and protecting the rights of minority shareholders.

    The Romanian government sold 51.2 per cent of its stake in Electrica in the IPO on July 4, raising USD 605 million, but it remains the biggest single shareholder.

    Gian Piero Cigna, Senior Counsel — Corporate Governance at the EBRD, explained that the Electrica corporate government action plan: “ensures that Electrica will operate with the same level of good governance as any western company. In particular, it provides for the nomination of three qualified and independent directors, out of the five who sit on the board. This ensures that the board includes people with appropriate qualifications and who can view matters objectively, without any conflict of interest.” The action plan also sets out Electrica’s position on its nomination and remuneration policies, board committees, articles of incorporation and internal control framework.

    Cigna feels the action plan was critical to the positive results of the IPO: “We don’t yet have a rating for Electrica, but I suspect that the corporate governance action plan was one factor in the success of this latest IPO.” 

    The EBRD notes that the project was undertaken by Electrica through the signing of a Framework Agreement with the Bank. The EBRD expects the project to increase private ownership, as this is the first majority privatization of a state-owned company via the Romanian stock exchange, and the Bank expects the IPO to contribute to the liquidity and depth of the Bucharest Stock Exchange.

    EBRD lawyer Enrico Canzio was the Bank’s Senior Counsel on the deal, and he reports that no outside counsel was involved.

     

  • Oh Sirius, June Issue Available to All!

    The Dog Days of Summer, as the Greeks called this time of year, associating the extremely hot weather with Sirius — the brightest star in the constellation Canis Major (Large Dog), and the brightest star in the night sky. The Romans went so far as to sacrifice a red dog in April to appease the rage of Sirius, out of a belief that the star was the cause of the hot, sultry weather.

    But that’s foolish, and modern types, like us, know better. We believe in science, not superstition.

    So we know that Sirius’s rage is sated not by a Red Dog … but by the news that all the content from the June 2014 issue of CEE Legal Matters magazine — the one with the big gorilla in a suit on the cover — is now moved from behind the paywall! Sirius, and other non-subscribers can now enjoy the articles, opinions, interviews, and other fascinating features that those brave and ambitious individuals who have invested in the advantage of the two-month head start have already read, assimilated, and acted upon. 

    Let’s review, shall we, Sirius? The Guest Editorial in the June issue is an essay about the unpredictability of CEE practice by Schoenherr Partner Marcus Piuk. The Across the Wire feature includes the popular Summary of Deals and Cases and Summary of Partner Moves that subscribers generally turn to first. Articles in The Frame – as always, informative, entertaining, and enlightening – include “Roots in Revolution” – an article about the American law firm that ties its presence in Poland to the 1980s Solidarity movement – and Part II of the special “Glass CEEling” report on female partnership opportunities in Central and Eastern Europe. Other Frame articles include “Moving In, Moving On”, a profile of two lawyers in Turkey adapting to non-legal Country Manager positions, “Behind the Deal”, a conversation with the lawyer responsible for engineering LEGO’s new plant in Hungary, and a special CEE Legal Matter Round-Table conversation on the future of international law firms in CEE. 

    The Market Spotlight in the June issue fell on Russia, with a Guest Editorial from Sergei Voitishkin, the Managing Partner of Baker & McKenzie, and “Bad for Business” – a conversation with Managing Partners at international law firms in Russia about the effect Western sanctions are having on their business. The Market Spotlight also contains in-depth conversations with Heads of Legal for Russia at Danfoss, ABB, PPF Life Insurance, Lukoil, and Groupon, as well as the Expat on the Market interview with Doran Doeh, a Partner and Russia expert at Dentons in Moscow.

    The subject of the Experts Review feature is Privatization/PPP, with experts from  top ranked law firms in the field from across CEE providing analysis and perspective on the state of affairs in their markets. Finally, the popular Top Sites feature focuses on law firm websites in Hungary and Russia.

    So we say: Oh Great Sirius, please hear our plea: Lessen the extreme heat you inflict upon us, and be informed, educated, entertained, and pleased by the news that the June issue is now available to you!

    And … we hope everyone else will do the same. 

     

  • Fellner Wratzfeld Advises Bank Austria on Takeover of Immobilien Holding from Immobilien Privatstiftung

    Fellner Wratzfeld & Partners had advised UniCredit Bank Austria on its acquisition of Immobilien Holding, which until now was wholly owned by Immobilien Privatstiftung.

    The purchase agreement was signed on July 25, 2014, subject to consent by the Bank Austria supervisory board and subject to approval by the Austrian competition authorities. The participation rights in Immobilien Holding which Bank Austria has held so far will be extinguished as part of the transaction.

    Immobilien Holding holds interests in about 80 real estate companies throughout Austria, including Donauturm Aussichts- und Restaurantbetriebs and Wien Mitte Immobilien. It also holds equity interests in various project management and shopping center management companies. In addition to advising Bank Austria on the transaction, fwp also drafted and negotiated a share purchase agreement and registered the merger.

    The firm’s team was led by Partner Markus Fellner, working with Partner Paul Luiki and Attorneys-at-law Maria Thierrichter and Christoph Hilkesberger. Antitrust law expert and fwp Partner Lukas Flener handled the merger registration process.

     

  • Herbst Kinsky Advises Raffeisen and UNIQA on Sale of Shares in STRABAG

    Herbst Kinsky has advised the Raiffeisen Holding Group and the UNIQA Group on the sale of 25 percent and one share shares in STRABAG SE to Rasperia Trading Ltd.

    According to Herbst Kinsky, “based on a shareholder agreement between Rasperia, the Haselsteiner family and the Raiffeisen Holding/UNIQA Group in 2010, Rasperia exercised a call option to purchase 6,377,144 STRABAG shares from the other shareholders at a price of EUR 19.25 per share.”

    STRABAG is a Vienna-based technology group for construction services across Europe. Rasperia, an industrial holding of the Russian Basic Element group controlled by Oleg Deripaska, previously held 19.4 percent in STRABAG.

    Herbst Kinsky’s team was led by Philipp Kinsky.

     

  • Sorainen Advises Nordea Finland on Moving its Baltic Branches to Swedish Parent Company Nordea Bank

    Sorainen has advised Nordea, the largest financial services group in northern Europe, on the transfer of its Baltic banking business — operated by Nordea Bank Finland in Estonia, Latvia and Lithuania — to its Swedish parent company Nordea Bank. 

    The firm describes the transaction as, “the first transfer of a pan-Baltic credit institution business as a going concern of such scale and complexity covering all three Baltic States,” and says that it “involved transfer of the material part of regulated banking operations of one of the largest banks in the Baltics, and had to be implemented in all three countries simultaneously, despite differences in the legal frameworks.”

    Sorainen advised Nordea throughout the transaction, from drafting the initial project implementation plan through to closing and actual transfer of the business. The team supported Nordea in liaising with the local financial supervision authorities in the Baltic States, and established new branches of Nordea Bank in the Baltics. The firm claims that the scope and complexity of the transaction required involvement of most of its practices (including banking and finance, M&A, real estate, dispute resolution, public procurement, employment, and tax). 

    The Sorainen team involved lawyers from all three Baltic offices. It was led by Partners Rudolfs Engelis, Tomas Kontautas, and Reimo Hammerberg, and included Senior Associates Santa Rubina, Augustas Klezys, Mantas Petkevicius, and Piret Lappert.

     

  • Alrud Advises on Third Public Offering of QIWI plc Shares

    Alrud has assisted in the arrangement of the third public offering (SPO) of QIWI plc shares, which was completed on June 20, 2014.

    According to the firm a total of 7,973,330 American depositary shares (about 14.7% of the total number of shares in the company) were placed under the public offering at the price of 40 USD per share. The initial public offering of QIWI shares took place in May, 2013, at the price of 17 USD per share.

    Alrud prepared a Legal Opinion under Russian law for underwriting banks in respect of the QIWI Plc. SPO. The firm’s team consisted of Senior Associates Andrey Zharskiy and Yulia Petrakova and Attorney Apollinaria Simoshina

     

  • Hunting Legal Heads: A Q&A With a Polish Legal Recruiter

    Hunting Legal Heads: A Q&A With a Polish Legal Recruiter

    Magdalena Kultys is a Polish lawyer now working as a Senior Consultant and Legal Recruiter at Capital Search International in Warsaw. We asked her to provide some perspective for our readers on the legal recruiting business in Poland and current opportunities in the Polish legal market.

    Magdalena Kultys, Senior Consultant and Legal Recruiter, Capital Search International

       

    Magdalena Kultys, Senior Consultant and Legal Recruiter, Capital Search International

     CEELM: What’s your background –how did you become a legal recruiter?

    M.K.: My route into headhunting has been a far from a typical one, at least here in Poland. Prior to joining Capital Search International, I worked as a transactional lawyer, first at K&L Gates, then at Baker McKenzie. 

    Quitting a rather clear-cut career path was a tough decision to make. I saw so many similar suits like me and realized that I wanted something different. The opportunity came when I received a job offer from my current company when it decided to expand into the legal recruitment business. I thought to myself, “it’s now or never,” quit the law firm, and stepped over the fence to the headhunting side. 

    But of course my previous experience as a practicing lawyer helps me every day in understanding my clients’ needs and in helping them find the best lawyers Poland has to offer.

     CEELM: Are you and your colleagues seeing much movement in Poland at the moment, or is it still quiet?

    M.K.: We’re not quite back to what we observed before the economic crisis of 2008. But the first half of 2014 was very promising – especially in TMT (Technology Media Telecommunications), transactional, and tax practices. This is in line with Poland’s economic growth forecasts. Poland’s consumer confidence index is at its highest point since 2010; GDP growth is accelerating. Based on what clients are telling me, the second half of 2014 will see significant movement on the Polish legal market.

     CEELM: Where do you see most of your work coming from, as a legal recruiter? Local firms, international firms, or in-house roles for corporates?

    M.K.: Currently, there are two major recruitment trends. The first is recruiting for senior positions – partners, counsels and senior associates – in the international law firms. The second trend is that big companies are looking to fill positions in their legal departments, both general counsel and in-house lawyers. Small and medium-sized local legal offices tend to look for candidates on their own. 

     CEELM: What practice areas are in most demand at the moment in Poland?

    M.K.: Since the beginning of the year clients have been expressing great interest in finding lawyers who specialize in IT, data protection and e-commerce. Law firms are trying to meet the expectations of their TMT clients. There’s a lot of demand for lawyers with an extensive knowledge of the law and terminology specifically related to IT. So, to any IT lawyers reading this – I have your dream job waiting here in Poland!

    Alongside this trend in IT law, there is high demand for transactional lawyers with a strong second specialization, such as employment law, general corporate law or competition law. 

    In the eyes of my clients, lawyers focused on two practices give great added value to the firm, as they can be flexible in demanding times. On the other hand, as the saying goes, jack of all trades, master of none: claiming to know more than three practices is seen as no specialization at all.

     CEELM: Are law firms and companies in Poland comfortable using legal recruiters, or are you still expected to explain/prove your usefulness sometimes? Does that differ among international law firms and domestic firms?

    M.K.: There’s a saying: “If you think it’s expensive to hire a professional, wait until you hire an amateur.” Small and medium-sized domestic law firms usually learn this lesson the hard way. In most cases they decide to conduct recruitment processes on their own. As a result, they suffer from high staff rotation which scares legal talent away. In many cases we have to explain to them that using legal recruitment services will improve their work and add value. In the last year the number of small and medium-sized law firms (including boutique law firms) who sought the assistance of legal head hunters increased slightly but it is still not a very big market.

    On the other hand, international law firms, large domestic legal offices, and large companies use legal recruiters regularly. It allows them to save two very important things: time, and in the long-term, money.

     CEELM: Is there any role for expatriate lawyers wanting to come work in Poland, or are those opportunities limited?

    M.K.: Let me use an example: Banking & Finance attorneys who advise on preparing LMA standard documentation will easily join projects in every European country, including Poland. On the other hand, lawyers with a litigation background from London might have serious difficulties in adapting to our proceedings (excluding international arbitration). The conclusion is simple: the opportunities for expatriate lawyers depend on their qualifications and their practice area. Our legal market is still growing so there will be more interesting positions for expats lawyers in big law firms. However, we must admit that it is more difficult to transfer expats in-house than lawyers in law firms, as legal departments generally favor lawyers already based in their jurisdictions.

  • Guest Editorial: Assisting Private Sector Development in CEE

    Guest Editorial: Assisting Private Sector Development in CEE

    Most countries featured in CEE Legal Matters are also EBRD countries of operations. I am therefore very grateful for the opportunity to contribute the “guest editorial” to this edition of the journal.

    Norbert Seiler

       

    Norbert Seiler, Deputy General Counsel, European Bank for Reconstruction and Development 

    I had the good fortune to join the EBRD’s legal department back in 1991, a few months after the Bank started its operations, and have been part of the Bank’s legal team ever since. Initially I worked as a transaction lawyer on EBRD project financings, sovereign loans, equity investments and Treasury operations. I started the Bank’s law reform initiative the “Legal Transition Programme”, and I eventually assumed responsibility for several legal teams working on investments and loan financings in the Bank’s countries of operations, Treasury operations, and institutional and administrative matters for the Bank’s own needs as an international financial institution. 

    The EBRD was established to assist the countries of Central and Eastern Europe in their transition to market economies after the collapse of communism and the fall of the Berlin Wall in the late 1980s. I was based in New York at the time when these dramatic events unfolded, working in-house at the New York branch of an Austrian bank. Along with the rest of the world I was fascinated and amazed by these developments:  Having grown up in Vienna some 60 km away from the “Iron Fence” border between neutral Austria and the Warsaw Pact countries of Hungary and Czechoslovakia, it had been altogether inconceivable that our binary world order, with the free market economies of the West and the closed command economies in the East, would ever come to an end.   

    When I first learned about the plans of the international community for a new development bank, which would assist the transition and private sector development in Central and Eastern Europe, I hoped that one day I might be able to join that bank to make my own modest contribution to the region’s transformation. I eagerly followed media reports about the international negotiations culminating in the inauguration of the Bank in London in early 1991, and I eventually submitted my application. I was not aware at the time that I had met the Bank’s newly appointed General Counsel on a transaction in New York, when he was still a senior partner at a prominent Wall Street firm. I suppose I must have left a favorable impression on that deal, because he invited me to join his fledging department, which I gladly accepted.

    When I arrived at the Bank it had seven countries of operations – Hungary, Yugoslavia, Czechoslovakia, Poland, Romania, Bulgaria, and the USSR. It was still to make its first loans or equity investments, and it had not yet launched its inaugural bond issue in the international capital markets. The legal department consisted of eight lawyers, most of whom were focusing on institutional and policy matters, setting the legal and policy foundations for this international start-up operation. The other lawyers (including myself) worked on EBRD’s early transactions. I became the lawyer for EBRD’s Treasury Department and assisted with the Bank’s inaugural bond issue, its first derivatives transactions, and its first MTN Program. I also advised on many pioneering EBRD transactions in our countries of operations, such as the Bank’s first syndicated loan, its first equity investment, and its first investment in a private equity fund.   

    Since these early days the political and economic landscape of our region of operations has substantially changed. The number of the Bank’s countries of operations currently stands at 35 countries. Three of the original countries of operations – USSR, Yugoslavia, and Czechoslovakia – dissolved, with their successors all becoming EBRD countries of operations. The Bank is now also active in Mongolia, Turkey, Egypt, and other southern Mediterranean countries. EBRD has become the single largest source of financing in many of our countries of operations, and it is universally recognized for its support of private sector development. In 2013, EBRD signed close to 400 projects with a combined financing volume of EUR 8.5 billion. 

    My department has evolved along with the rest of the Bank. We have new teams of international transaction lawyers at the Bank’s headquarters in London, as well as in Moscow, Istanbul, and Kiev. We also maintain legal teams specializing in capital market transactions, corporate recovery and litigation matters, and institutional and administrative issues, and our Legal Transition Program has become an important source for expertise and support for law reform initiatives supporting private sector development. 

    My own role continues to be as varied and fascinating as ever. The legal department plays an important role in the Bank’s work, and as a member of the department’s senior management team I am now able to contribute to its overall strategic orientation.  

    The EBRD remains fully committed to supporting the countries of CEE in their progress towards sophisticated, fully-functioning market economies. I consider myself truly fortunate to have been working in the region since 1991, and I look forward to seeing continued progress in the years to come. I thank CEE Legal Matters for the opportunity to introduce this issue, and I am delighted to see in it another sign of the increased opportunities and continuing economic development of our part of the world.

    By Norbert Seiler, Deputy General Counsel, European Bank for Reconstruction and Development