CEE Legal Matters

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  • Karanovic & Nikolic Obtains Successful SEE Merger Clearance for Agorkor

    Karanovic & Nikolic has assisted Croatia’s Agrokor in its successful applications for merger clearance in relation to its combination with Slovenia’s Mercator.

    The 2013 acquisition of Mercator by Agrokor was conditional upon competition commissions clearance, and the approval of the Serbia, Croatia, Slovenia, Kosovo, Macedonia, Bosnia and Herzegovina, Montenegro, and Albania authorities thus clears the path for the EUR 240 million deal to be finalized. 

    Agrokor is the largest privately owned company in the former Yugoslavia. It produces and distributes food and beverages, and owns Konzum, Croatia’s leading grocery chain. Mercator is the largest retailer in Slovenia and one of the largest retailers and wholesalers in the region.

    Karanovic & Nikolic reports that three out of the eight competition authorities initiated in-depth (Phase II) investigations, marking the first time a single case was scrutinized by so many states simultaneously. Phase II investigations are initiated when authorities consider that a transaction could lead to lessened competition in affected markets. In such investigations, authorities use their investigatory powers to collect information from third parties to assess competition concerns arising from a transaction. In Serbia and Croatia, Agrokor offered to divest several assets to dispel concerns raised by authorities. In all other jurisdictions, the transaction was cleared without conditions. 

    Karanovic & Nikolic acted as lead advisor on the original deal before obtaining the successful merger clearances. The firm’s legal team was headed by Partner Rastko Petakovic.

  • Herbert Smith Appoints New EMEA Head of Disputes

    Herbert Smith Freehills has announced today the appointment of London-based partner Philip Carrington as the firm’s Head of Disputes in EMEA.

    Carrington has been with the firm for over thirty years. According to the Herbert Smith press release, he has been heavily focused throughout his career on Europe, in particular on dispute work originating in Russia, the CIS and other emerging markets. He regularly works with the firm’s Moscow office on large and complex cross-border disputes involving Russian parties and with the firm’s offices and clients in the Middle East.

    As Head of Disputes in EMEA, Carrington will be responsible for strengthening the firm’s disputes platform across this region, with specific focus on Europe as a significant area of growth for the firm. He will work alongside Regional Dispute Heads Geoff McClellan (Australia), Mark Shillito (UK/US) and Peter Godwin (Asia) to connect disputes teams across the international network and ensure growth of the firm’s share of major disputes work worldwide. Together they will form the global disputes management team under the leadership of global head Justin D’Agostino and lead on the implementation of global disputes strategy and further enhancement of the group’s reputation with clients across geographies and sectors.

    His appointment was announced together with that of Damian Grave, who relocated recently from Australia to London and who was recently appointed as a Client Development Partner, and together with the appointment of Isabelle Michou as the Head of the Paris Disputes Group. 

  • Orrick Advises Sberbank on USD 500 Million RE Facility

    Orrick has advised Sberbank CIB as the arranger on a complex refinancing for MLP Group, a leading warehouse distribution operator in Russia and Ukraine.

    The USD 500+ million financing was split into two concurrent secured facilities. MLP operates over 730 square meters of industrial warehouse facilities, including two facilities near Moscow and Saint Petersburg and one near Kiev, Ukraine. MLP also owns a land portfolio including a total of more than 120 hectares of land plots near Moscow and Saint Petersburg.

    The Orrick team included Dmitry Gubarev, Victoria Bryxa, Svetlana Gareeva, and Maria Shkrabina in Moscow, and Alexander Janes and Paul Denham in London.

     

     

  • P&P Advises Goldman Sachs and Morgan Stanley on NBG Offering

    Papapolitis & Papapolitis announced that it advised Goldman Sachs International and Morgan Stanley & Co. International as joint global coordinators and joint book runners in connection with an offering by National Bank of Greece of 1,136,363,637 new ordinary shares at a price of EUR 2.20 per share designed to boost its core capital.

    The total gross proceeds from the offering amounted to EUR 2.5 billion. Citigroup Global Markets Limited, HSBC Bank, Mediobanca – Banca di Credito Finanziario, Merrill Lynch International, and UBS Limited acted as joint bookrunners. The new ordinary shares are listed on the Athens Stock Exchange. 

    Greece’s largest bank by assets got the go-ahead from bank bailout fund and 84 percent shareholder HFSF to raise funds to plug a EUR 2.18 billion capital hole, a central bank stress test revealed in March. The bank, with subsidiaries in the Balkans and Turkey, had previously resolved not to resort to the financial markets to fill the gap but focus on selling non-core assets instead. This changed after pressure by the central bank to follow the example of its peers Alpha Bank and Piraeus, which have already raised EUR 2.95 billion between them from markets. Eurobank, the country’s third-largest lender, is also tapping markets for EUR 2.86 billion, and has already secured commitments to the offer by a Canadian-led investor group for EUR 1.3 billion.

    NBG’s equity offering will not include pre-emption rights for existing shareholders, including the HFSF, as was the case with share offerings by its peers. NBG’s board said the funds will also help it pay back EUR 1.35 billion worth of preferred shares held by the Greek state.

    Papapolitis & Papapolitis lawyers working on the deal included Nikolaos Katsaros, Katerina Dalamara, Martha Fotinopoulou, and Nicholas Papapolitis.

     

  • Sorainen Protects TV3 Latvia from Competition Proceedings

    Sorainen’s Latvia office has announced that the Latvian Competition Council decided not to initiate a case of possible abuse of dominant position in the activities of TV3 Latvia. The Latvian Lattelecom internet service provider and telecommunications company applied for the Competition Council’s review. 

    TV3 is the most popular television channel in Latvia. Owned by the Modern Times Group, it was first launched in 1998. Lattelecome is owned by the Latvian government (51%) and the Scandinavian TeliaSonera company (49%).

    In its decision the Competition Council concluded that conditions in the television program production and distribution market have significantly changed since the dominant position of TV3 Latvia was alleged. At the same time, the Competition Council stated that currently there are no reasons for suspicion regarding the application of an unfair pricing policy by TV3 Latvia. Likewise it was also not established that Lattelecom faced discrimination compared with attitudes towards the rest of the pay-TV operators in the market.

    TV3 Latvia was represented by Sorainen Partner Ieva Azanda and Associate Tatjana Caika.

    TV3 Latvia is a television channel targeted at a Latvian language audience owned by Modern Times Group. It was launched in 1998, but did not receive a terrestrial license until 2001. The channel has since increased its viewing share to become the most popular channel in Latvia as of September 2007, surpassing its closest rival LNT.

     

  • Sorainen Obtains Approval of Insurance Company Merger

    Sorainen announced that on May 29, 2014, the Latvian Competition Council approved the merger of the Polish Powszechny Zaklad Ubezpieczen (PZU) and the Latvian Balta insurance companies.

    According to a statement released by the Sorainen, “approval was granted since the concentration in the non-life insurance services market will not change significantly as a result.”

    PZU will acquire control over Balta through the merger. The acquisition of Balta’s shares is part of PZU’s international expansion plan, as the company wants to widen its territory of operation in the Baltic States. As stated in the merger notification, by acquiring Balta’s shares, PZU intends to become one of the biggest insurance market players in Latvia.

    The Competition Council decided that as there are several other strong competitors in the Latvian insurance market, and PZU’s market share is small, the changes in the concentration of the Latvian non-life insurance services market due to the change should be insignificant.

    PZU provides life and non-life insurance services and administers pensions, mutual investment funds, and saving programmes. PZU acquired Balta’s assets from the British and Welsh company Royal & Sun Alliance. Sorainen reports that PZU expects to take over insurance providers in both Lithuania and Estonia from Royal & Sun Alliance as well (reported on by CEE Legal Matters on April 18, 2014, and May 8, 2014.

    PZU was represented by Sorainen Partner Ieva Azanda and Senior Associate Ieva Andersone.

     

  • Lextal Advises HKScan Baltic Subsidiaries on Mergers and Name Changes

    Lextal has advised Tallegg and Rakvere Lihakombinaat, Estonian subsidiaries of the HKScan group, on a merger and business name change.

    The merger of the two created Estonia’s biggest foods production company, HKScan Estonia, although the brands will continue to trade under the “Rakvere” and “Tallegg” marks.

    Lextal also advised on the business name changes of HKScan Group’s subsidiaries in Latvia and Lithuania, Rigas Miesnieks (which changed its business name to HKScan Latvia and does business on the Latvian market as “Rigas Miesnieks” and “Jelgava”) and Klaipedos Maisto Mesos Produktai (which changed its business name to HKScan Lietuva and does business in Lithuania under the “Klaipedos Maistas” brand). 

    HKScan is a manufacturer of meat foods and products, as well as ready meals and pet foods. It is Europe’s fifth largest food manufacturer, and is based in Turku, Finland. 

    The total turnover of HKScan’s Baltic Group subsidiaries is EUR 175.1 million, which constitutes approximately 10% of the group’s total turnover.

     

  • Kinstellar Advises EBRD on Wind Farm Loan

    Kinstellar’s Bucharest office has advised ERBD on the EUR 57 million loan for the development of the Topolog-Dorobantu wind park in the South–East of Romania.

    The 84 MW wind farm in Tulcea county will be built by LUKERG Renew, a joint venture between Italy’s ERG Renew and Russia’s LUKOIL-Ecoenergo, will include 42 Vestas V90 2 MW wind turbines, and is expected to generate more than 200 GWh of electricity per year. This is the eighth wind farm project that the EBRD has financed in Romania.

    The Kinstellar team was led by Partner and Head of the Banking practice Bogdan Bibicu, assisted by a multi-practice team consisting of Partner and Head of the Energy Practice Stefan Botezatu, Senior Associate Catalin Georgescu, and Associates Amalia DeLigenza, Larisa Gabudeanu, Smaranda Vacaru, and Vlad Cordea.

     

  • Sayenko Kharenko Advises EBRD on Loan to Ukrainsky Grafit

    Sayenko Kharenko has advised the EBRD on a USD 26 million loan to the Ukrainsky Grafit public joint-stock company.

    According to the firm “Ukrgrafit will use the funds raised for financing of the reconstruction and modernization of the manufacturing facilities and introducing energy efficient technologies into the production cycle.”

    Ukgrafit is the only Ukrainian manufacturer of graphite electrodes for electric steel, electric-arc furnaces, and other applications in the steel, aluminum, magnesium, and titanium industries.

    Sayenko Kharenko’s team was led by Partner Nazar Chernyavsky, and included Senior Associate Igor Lozenko and Associates Marta Hontaruk and Taras Shyb.

    This is another in a series of EBRD-related transactions in Ukraine in recent months. As reported previously, the EBRD has made 2014 loans to Danosha, UBC-Promo, New Europe Property Fund, Raffaisen Bank Aval, and Concern Galnaftogaz, and has purchased a minority stake in Amtel Properties.

     

  • FBK Legal Advises on SEVERALMAZ Issue of Shares

    FBK Legal’s has announced that its Corporate department has assisted SEVERALMAZ in the placing of additional shares in the company by open subscription.

    An FBK statement explained in addition that “Owing to the issue of additional shares SEVERALMAZ can attract additional investments to an amount of about RUB 16 billion.” 

    FBK Legal prepared a package of documents for the issue registration and a prospectus of the emission of shares. The Bank of Russia registered them on May 13, 2014. According to Dmitry Kudrin, the FBK Legal Corporate Practice lawyer heading the project, the plan is to complete the project by the end of the year, and “the final stage will be to have the report on the results of capital issue registered.”

    SEVERALMAZ, in Russia’s Archangelsk Oblast, mines the Lomonosov diamond field, which is believed to have reserves of about 200 billion carats of rough diamonds.