CEE Legal Matters

Category: Austria

  • Weber & Co., Herbst Kinsky, and Clifford Chance Advises on Marinomed Biotech IPO in Vienna

    Weber & Co., Herbst Kinsky, and Clifford Chance Advises on Marinomed Biotech IPO in Vienna

    Weber & Co. acted as underwriter’s and managers’ counsel to the managers Erste Group Bank AG (Sole Global Coordinator) and goetzpartners securities Ltd (Co-Lead Manager) on Marinomed Biotech AG’s upcoming February 1, 2019 debut on the Vienna Stock Exchange — the first successful IPO in Austria since BAWAG’s in 2017. Herbst Kinsky Rechtsanwalte advised Marinomed, with Clifford Chance Frankfurt advising the company on US law aspects of the IPO. The shares are expected to be listed on the Official Market (prime market segment).

    Marinomed Biotech is a biopharmaceutical company founded in 2006 as a spin-off of the University of Veterinary Medicine Vienna, focusing on the development of innovative products derived from patent protected technology platforms to treat respiratory and ophthalmic conditions. According to Weber & Co, “the Marinosolv technology platform increases the efficacy of hardly soluble compounds for the treatment of sensitive tissues such as the eyes and nose. The Carragelose platform comprises innovative patent protected products targeting viral infections of the respiratory tract. Carragelose is used in nasal sprays, throat sprays, and lozenges which are sold in more than 30 countries around the world in collaboration with international partners.”

    According to Weber & Co., “in the course of the IPO, 299,000 shares of Marinomed were placed with investors for an offer price of EUR 75 per share. The public offering in Austria, which was resumed following a suspension in November 2018, took place from January 24, 2019 until January 29, 2019. The transaction also comprised a private placement outside of Austria to selected institutional investors, including a private placement in the United States of America to qualified institutional buyers. Based on the total number of 1,299,000 Marinomed shares (assuming a full exercise of the greenshoe option) and the offer price of EUR 75 per share, the market capitalization of Marinomed will amount to approximately EUR 97.4 million.”

    In preparation of its IPO, Marinomed issued convertible bonds in 2017, with Herbst Kinsky again advising Marinomed and Weber & Co. acting as legal counsel to arranger Erste Group.

    According to Weber & Co. Partner Christoph Moser, who led the firm’s team, “the IPO of Marinomed is a milestone in the recent capital market history in Austria. With the first IPO in Austria for more than one year, the company draws the topic biopharmaceuticals into the spotlight of the Vienna Stock Exchange. The successful placement of new shares in a still volatile capital market environment proves the significant interest of investors in the Marinomed capital market story. We are thankful to support the managers in this exceptional transaction.”

    In addition to Moser, the Weber & Co. transaction team included Partner Stefan Weber and Associates Angelika Fischer, Yvonne Gutsohn and Clemens Nostler.

    The Herbst Kinsky team was led by Partner Philipp Kinsky.

    The Clifford Chance team in Frankfurt was led by Partner George Hacket and include Senior Associate David Santoro, Associate Andrei Manea and Transaction Lawyer Anjana Parvathy, New York-based Partner Avrohom Gelber and Associate Eric Naftel assisted on Tax matters, and Washington-based Partners Glen Donath and George Kleinfeld and Counsel Jacqueline Landells provided regulatory advice. 

    Editor’s Note: This article has been updated to identify all members of the Clifford Chance team.

  • Schoenherr and Eisenberger & Herzog Advise on Playtika’s Acquisition of Supertreat

    Schoenherr and Eisenberger & Herzog Advise on Playtika’s Acquisition of Supertreat

    Schoenherr has advised Playtika Ltd. on the acquisition of Supertreat GmbH, the developer of the mobile game Solitaire – Grand Harvest. Eisenberger & Herzog advised the sellers.

    Financial terms of the transaction, which closed on January 16, 2019, were not disclosed.

    Playtika is a game publisher with 22 million active monthly users. Founded in 2010, the company is among the first to offer free-to-play social games on social networks, and subsequently on mobile platforms, Schoenherr reports. The company, which is headquartered in Herzliya, Israel, has over twelve offices worldwide including Tel-Aviv, London, Montreal, Chicago, Las Vegas, Santa Monica, Buenos Aires, Tokyo, Kiev, Bucharest, Minsk, Dnepr, and Vinnitsa. In 2016, Playtika was acquired by Shanghai Giant Network Technology as reported by CEE Legal Matters on August 15, 2016 and November 21, 2016.

    Founded in 2016, Supertreat is a mobile games developer located in Graz, Austria. Its flagship app is Solitaire – Grand Harvest, which Eisenberger & Herzog describes as “currently the  most successful card game apps for Android and iOS worldwide, [and] which has more than 100 million users.”

    The Schoenherr team in Vienna was led by Partner Thomas Kulnigg and included Partners Alexander Popp and Christoph Haid, Attorneys-at-Law Manuel Ritt-Huemer, Dominik Hofmarcher, Klaus Cavar, and Veronika Wolfbauer, Counsel Gunther Leissler, and Associates Christopher Junger, Paul Nimmerfall, Janos Boszormenyi, Sebastian Lukic, Birgit Hirsch, and Karin Pusch.

    The Eisenberger & Herzog team was led by Partner Alric Ofenheimer and included Partners Dieter Thalhammer, Andreas Zellhofer, Helmut Liebel, and Jana Eichmeyer, Attorneys-at-law Christopher Engel, Stefan Wartinger, and Karolin Andreewitch,  and Associates Helena Neuner, Wolfgang Kofer, Ladislav Bulajcsik, Alissa Forstner, and Florian Sagmeister.

  • SCWP Schindhelm Advises Startup300 on Listing in New Market Segment of Vienna Stock Exchange

    SCWP Schindhelm Advises Startup300 on Listing in New Market Segment of Vienna Stock Exchange

    SCWP Schindhelm has advised Startup300 AG on its listing on the Vienna Stock Exchange, making it, according to the firm, “one of the first companies from the Austrian start-up scene” to be so listed.

    “In the three years since its foundation in December 2015,” SCWP Schindhelm reported, “Startup300 has developed from a business angel network to an operator of an integrated start-up ecosystem. In its first fiscal year 2016, the focus was still on investing in early-stage technology startups, but Startup300 now operates an innovation ecosystem in which founders, startups, investors and innovative companies have access to talent, network, offices, consulting, capital and events. Startup300 makes direct start-up investments via Pioneers Ventures (currently 27 investments) and the VC fund Capital300, in which Startup300 holds an interest.”

    According to SCWP Schindhelm, “In October 2018, the legislator laid the foundation for the access of Austrian startups and SMEs to the capital market by passing amendments to the Austrian Stock Corporation Act which have been in force since January 1, 2019. The issuance of bearer shares required for the admission to the Dritter Markt market segment of the Vienna Stock Exchange was considerably facilitated. Previously, this was only possible for companies intending to list on an EU regulated market (official trading). The Vienna Stock Exchange responded to the legislator’s actions by creating two new segments, SCWP Schindhelm continues, “the Direct Market and Direct Market Plus, which will be part of the market segment Dritter Markt from January 21, 2019 onwards. Listing in these segments is subject to fewer requirements and follow-up obligations than listing in the Official Market. The fees are also considerably lower (EUR 5,000 one-time for inclusion and EUR 1,000 annually).”

  • Will Austria Soon Have Class Action Lawsuits?

    While globalization and digitalization have increased the risk of violations that affect thousands of consumers, several EU member states — including Austria — do not yet offer class action lawsuits. The EU Commission has therefore proposed a draft directive to allow representative actions for the protection of collective interests of consumers as part of its “New Deal for Consumers.”

    According to the draft directive, a “qualified entity” can bring an action against a company that breached specific EU legislation (currently a list of 59 consumer protection laws) and thereby damaged or may damage the collective interests of consumers. Consumers are not entitled to file such a claim, nor be involved in the proceedings. This corresponds with the rules for representative actions already existing in Austria, which can only be brought by a few organizations (e.g. the Chamber of Labor and the Austrian Consumers Association). The number of such authorized entities will likely increase: in addition to consumer protection groups and independent public bodies, other organizations – including ad hoc bodies specially organized for specific actions – may request designation and registration as a “qualified entity” by a member state. The directive lays out certain minimum criteria: the organization must be properly established, not be for profit, and have a legitimate interest in ensuring compliance with the relevant EU law. 

    If the qualified entity files for damages, it has to prove adequate financial capacity and disclose the origin of its funding to the court or administrative authority. Third-party funders must neither influence decisions regarding the representative action nor use the action to move against competitors. If it cannot be guaranteed that the funding complies with the regulations, the qualified entity may be ordered to refuse the funds, or its right to institute proceedings may be denied. This requires member states to determine which court or administrative authority should register and control the qualified entities and to institute procedures to authorize and supervise the qualified entities, bearing in mind that these tasks (especially the monitoring of the funding and the independence of these entities) are complex and will require significant human and technical resources. So far, third-party funding is not regulated in Austria, so introducing basic safeguards as foreseen in the draft directive would be a first good step.

    Although up to now organizations have only been able to file for injunctive relief, in the future they would be able to seek redress for consumers, such as compensation, price reduction, contract termination, or repayment of the purchase price, which would eliminate the need for consumers to first transfer their claims to the organization. In addition, a special form of punitive damages would be introduced: if the losses suffered by consumers are so small that it is disproportionate or not practicable to identify and compensate each individual, the compensation to be paid by the convicted trader should be directed to a public purpose with a consumer protection service. To prevent abuse, it will be necessary to regulate precisely the “public purpose” and how the proper use of the redress is verified. 

    In redress proceedings, the court would have the right to “invite” the qualified entity and the trader to reach a settlement, which would then be scrutinized with regard to legality and fairness by the court. This institutionalized settlement procedure would be another novelty for Austria. 

    Traders may be required to submit evidence, which would not have to be specified by the qualified entity: it would be sufficient to indicate that the evidence lies within the trader’s control. The introduction of such disclosure/discovery orders into Austrian law will require careful balancing of interests, clear principles for ascertaining whether a request for disclosure is justified or excessive, and care to ensure that sensitive information is appropriately protected (e.g. trade secrets and consumer data, the use of which should be limited to the purposes of the respective collective action). 

    Regulating the provision of information to consumers to ensure that they are aware of the action and its outcome would be extremely important. Consumers may then either claim the compensation they are due, or sue the traders themselves, especially if Austria decides to implement an “opt-in”: Member States can choose whether all customers or only those who give a mandate should be covered by redress orders. In any case, a new Austrian law will have to provide that an action brought by a qualified entity interrupts the statute of limitations for affected consumers, who can thus wait for the result without losing their claims.

    Implementing the directive would therefore result in many innovations, especially in procedural law. Despite all the criticism, the draft directive has many advantages – especially regarding legal certainty –  over the current handling of mass claims in Austria. Therefore, it is to be hoped that Austria would take the opportunity to introduce collective actions and collective settlements, and to regulate third-party funding – not just with respect to infringements of certain EU provisions, but in general.

    By Daniela Karollus-Bruner, Partner, CMS Austria

    This Article was originally published in Issue 5.11 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

  • Dorda Advises Cyan AG on License Agreement with Orange

    Dorda Advises Cyan AG on License Agreement with Orange

    Dorda and the French office of Bird & Bird (acting as local counsel) have advised Cyan AG, an IT security company listed on the Frankfurt Stock Exchange, on an international tender and on its entrance into a group license agreement with French telecommunications provider Orange S.A.

    According to Dorda, the customers of Orange affiliates in 28 countries will be given access to Cyan products. The Cyan product portfolio now also offers Orange customers protection for smartphones, tablets, and PCs.

    Cyan, a company based in Munich, has over 25 years of experience in the field of IT security and has subsidiaries and branches in Austria, Colombia, Mexico, Chile, the United States, and New Zealand, as well as a research and development center in Sopron, Hungary.

    The Dorda team was led by Partner Andreas Mayr and consisted of Partner Axel Anderl, Attorney Nino Tlapak, and Associate Adrian El Daly.

  • Brandl & Talos Advises GoLending on Issuance of Subordinated Debt

    Brandl & Talos Advises GoLending on Issuance of Subordinated Debt

    Brandl & Talos has advised GoLending AT GmbH on the preparation of a capital market prospectus for the issuance of qualified subordinated loans for approximately EUR 30 million.

    According to Brandl & Talos, the qualified subordinated loans, with a term of five years, can be subscribed from January 1, 2019 with a minimum subscription amount of EUR 4,850. The interest rate is 7.5% for the first 48 months and 9.725% for the last 12 months of the term.

    GoLending AT GmbH, which is based in Vienna, operates an online pawn shop. The capital raised through the qualified subordinated loans is intended to further strengthen the liquidity of the company and to finance and expand its operational activities in the area of providing pawn loans to commercial customers, Brandl & Talos reports.

    The Brandl & Talos team consisted of Partner Christopher Schrank, Attorney Martin Kollar, and Associate Hannes Schlager.

  • Fellner Wratzfeld Advising IKEA on Proposed Westbahnhof Store in Vienna

    Fellner Wratzfeld Advising IKEA on Proposed Westbahnhof Store in Vienna

    Fellner Wratzfeld & Partner Rechtsanwalte is serving as legal counsel to IKEA in the Swedish furniture giant’s opening of a branch “featuring a concept unique in the world” in Vienna’s Westbahnhof station.

    According to FWP, the store, which will stretch over several storeys at the train station, including the basement, each of which will cover approximately 3000 square meters, will display IKEA’s entire product line. “At the same time,” the firm reports, “neither a self-service hall nor car parking spaces have been provided for — something IKEA has never done before.” Instead, according to FWP, “customers will be able to have heavy items delivered and take easily transportable products with them immediately. One of the numerous highlights of the pilot project will be the publicly accessible roof with planting.”

    According to FWP, “following the envisaged amendment of the zoning plan, which has been available for inspection by the public since 3 January 2019, the new construction of the IKEA branch at Vienna’s Westbahnhof station will, among other things, require a building permit and an operating license for the opening to take place in 2021 as planned.”

    The FWP team is led by Partner Markus Kajaba.

  • Michaela Siegwart and Lorenz Pracht Make Partner at CHSH in Austria

    Michaela Siegwart and Lorenz Pracht Make Partner at CHSH in Austria

    Michaela Siegwart and Lorenz Pracht have made partners at CHSH Cerha Hempel Spiegelfeld Hlawati.

    According to CHSH, “Michaela Siegwart has been advising and representing national and international clients in complex commercial matters for many years. She specializes in procedural, procurement, insurance and construction contract law.” According to the firm, she “has been with CHSH since 2001 and was awarded her doctorate from the University of Vienna in 2013.”

    Lorenz Pracht, CHSH reports, “specializes in mergers and acquisitions, company law, capital markets law and energy law. After studying law at the University of Vienna, he went on to graduate from the International Tax Law” (LL.M.) program at the Vienna University of Economics and Business in 2007.” Pracht initially joined CHSH in 2008, though in 2012 he left to go in-house with OMV for two years, before returning to the firm in April 2015.

    “Welcoming two new partners is a clear sign of sustained growth,” asserted Managing Partners Albert Birkner and Clemens Hasenauer, in a joint statement. “In so doing, we are also laying the foundations upon which we can continue to expand the range of advisory services we offer our clients in the next few years. We’re delighted that two long-standing home grown talents, Michaela Siegwart and Lorenz Pracht, have rightfully been made partners of our firm.”

  • Austria: Decree Forbids Sale of CBD Products

    Exactly four months ago, we reported that the Austrian pastry shop Aida was starting to sell cakes containing CBD and explained the legal situation. In the meantime, everything has changed. Or has it?

    Although the sale of CBD products is booming in Austria and in Europe generally, Aida had to give away its cakes free due to a decree forbidding the sale of products containing CBD.

    Handling of cannabis extracts

    It was foreseeable that the Austrian government would take up the fight against CBD, as it had already announced it would do so in its programme. Nevertheless, many companies with CBD products in their portfolio were surprised when the Ministry issued a decree stipulating the handling of extracts containing cannabinoids.

    A decree is an internal administrative rule issued by a higher authority to lower authorities. The subordinate authorities will be bound by the provisions of the decrees, provided they do not conflict with the laws. According to the decree: “Extracts containing cannabinoids which are placed on the market as such or in food should therefore generally be considered as novel foods under Regulation (EU) 2015/2283 [“Novel Food Regulation”]. Only authorised novel foods included in the Union list may be placed on the market as such or used in foods in accordance with the conditions and labelling requirements laid down in the list. No such authorisation is currently granted. Placing on the market is therefore not permitted.” The Ministry stated that CBD should be banned from foodstuffs and cosmetics.

    It can be concluded from the wording that food and cosmetics containing CBD products may no longer be sold.

    No general ban on CBD products

    Unfortunately, the Ministry’s assessment is poorly expressed. The Ministry is essentially misusing the Novel Food Regulation to achieve its announced goals. Even though it is not entitled to interpret EU law, this is the privilege of the Court of Justice of the EU. Although the decree refers to “clarifications at the European level” as the basis for the legal opinion, such clarifications have actually – at least officially – not yet taken place.

    Consequently, only what is expressly laid down in the Novel Food Regulation can apply: Novel foods and food ingredients are defined in Article 1 Para 2 of the Novel Food Regulation as foods and food ingredients which were not yet used for human consumption to any significant extent in the EU by 15 May 1997. The use of the respective ingredient in pharmaceuticals or cosmetics is not sufficient, which is why, especially in the case of so-called “naturopathic plants” such as the cannabis plant, it must be precisely checked how the plant was used before 15 May 1997. In fact, detailed research shows that cannabis was already used as a foodstuff in the territory of the present European Union long before 1997. This ought to be largely undisputed. However, the same cannot be proven for CBD in pure substance, which is why in this respect a clear distinction must be made between whether a cannabis extract is used or CBD in pure substance.

    From the two entries in the (legally non-binding) Novel Food Catalogue of the European Commission on “Cannabis sativa L” and “Cannabidiol” it follows, on the one hand, that in the opinion of the European Commission, the cannabis plant itself is not to be classified as Novel Food.

    On the other hand, the Novel Food Catalogue explicitly states that extracts from the cannabis plant where the CBD content is higher than the CBD content in the source, namely the Cannabis sativa L plant, are novel foods. However, neither the Novel Food catalogue nor any legislative act of the European Union defines how high the “normal” CBD content is in a cannabis plant. According to our research it lies between 2 % and 4 %. As a result, it is also clear that foods containing hemp, in which CBD is naturally contained (e.g. hemp teas, hemp seeds, hemp (seed) oil, hemp (seed) flour, drinks such as hemp beer or hemp lemonades), are not subject to the Novel Food Regulation.  

    Bottom line

    CBD in its pure form should probably be considered a novel food unless the food business operator can demonstrate that the CBD extract was used as food before 15 May 1997. Then again, not all ingredients containing CDB are novel. The decree conceals this crucial differentiation and mentions a general prohibition, which cannot even be given due to the legal situation.

    It would have been desirable to clarify the legal situation and provide guidance to all parties involved in the CBD business, but the decree has not achieved this objective. On the contrary, confusion prevails. We will keep you posted about further developments. 

    By Andreas Natterer, Partner, Michaela Pohl, Associate, Schoenherr

  • E&H, Reed Smith, Shearman & Sterling, and Dorda Advise on Investment in Greenstorm Mobility

    E&H, Reed Smith, Shearman & Sterling, and Dorda Advise on Investment in Greenstorm Mobility

    Eisenberger & Herzog and Reed Smith have advised Austrian start-up Greenstorm Mobility on an investment into the company from European private equity firm Bregal Milestone L.P. Shearman & Sterling and Dorda advised Bregal Milestone.

    According to E&H, with the investment, Greenstorm plans to “improve its own service capacity, accelerate the growth of the company and further develop their e-commerce offer.”

    Based in Kufstein, Austria, Greenstorm Mobility leases e-mobility solutions to hotels and businesses across Europe by providing its customers with e-bikes, electric cars, and charging stations. The company is active in Austria, Germany, Switzerland, Italy, Croatia, and Slovenia. 

    Bregal Milestone belongs to the private capital firm Bregal Investments, managing a EUR 400 million fund dedicated to making debt and structured/minority equity investments in European middle market companies in such sectors as technology, healthcare, business services, consumer, high value manufacturing, and specialty finance.

    The E&H team was led by Partners Marcus Benes and Marco Steiner and included Attorney-at-law Laurenz Liedermann and Associates Johannes Feilmair and Niklas Kerschbaumer-Gugu.

    The Reed Smith team advising Greenstorm on German law included Partner Florian Hirschmann and Associates Tobias Schulz and Siling Zhong-Ganga.

    The Shearman & Sterling team in London was led by Philip Stopford.

    Dorda’s Partner Tibor Varga worked on the side of Bregal Milestone.