Category: Austria

BPV Huegel worked with the Frankfurt office of Herbert Smith Freehills in advising the Heidelpay Group, a German technology company for international payments, on the acquisition of the Paysafe Group’s Pay Later business. Binder Groesswang advised the Paysafe group.

According to BPV Huegel, “the transaction is part of the Heidelpay Group’s strategy to grow its European presence in order to enhance the product range for its own customers in the area of Pay Later payment methods. Paysafe Pay Later is a specialist provider for Pay Later payment methods with a geographical focus on the DACH region. As an omnichannel provider, the company offers white-labelled invoice solutions, such as purchase on account, installment purchase as well as bank transfers and direct debits for both online and bricks-and-mortar retailers.”

BPV Huegel’s team was led by Attorney at Law Daniel Reiter and included Co-Managing Partner Christoph Nauer, Partners Gerhard Fussenegger, Kornelia Wittmann, Sonja Durager, and Thomas Lettau, Attorneys at Law Roland Juill, Nicolas Wolski, and Paul Pfeifenberger, and Associates Barbara Valente, Emanuel Hackl, and Paul Pfeifenberger.

Herbert Smith Freehills’s team was led by Managing Partner Nico Abel, Partners Marcel Nuys, Kai Liebrich, Moritz Kunz, and Steffen Horner, Counsels Rudiger Hoffmann and Florian Huerkamp, Senior Associates Julius Brandt, Hannes Jacobi, and Simone Ziegler, and Associates Mirko Gleitsmann, Tatiana Guenster, and Quenie Hubert.

Binder Groesswang’s team was led by Partner Markus Uitz.

Freshfields Bruckhaus Deringer has advised an international banking consortium consisting of HSBC Bank plc, JP Morgan Securities plc, and Raiffeisen Bank International AG on Uniqua Insurance Group AG’s successful issuance of two bonds with a total volume of EUR 800 million. Schoenherr advised Uniqua on the deal.

A bond of EUR 600 million was placed with institutional investors, which is used to finance the acquisition of AXA Group companies in Poland, Slovakia, and the Czech Republic, and which is guaranteed by UniquaOsterreich Versicherung AG. The bond has a term of ten years, and the interest rate is 1.375 percent.

In addition, a regulatory subordinated instrument with a volume of EUR 200 million with a term of fifteen years and an initial interest rate of 3.25 percent was also launched.

Both bonds are subject to German law and are listed for official trading on the Vienna Stock Exchange.

Freshfields’ team included Partners Stephan Pachinger and Christoph Gleske, Principal Associates Birgit Schulz and Christian Jolinger, and Associate Jasmin Julia Denk.

Schoenherr’s team was led by Partner Ursula Rath and consisted of Partner Peter Feyl, Attorney at Law Marco Thorbauer, and Associate Viktoria Stark.

DLA Piper has advised Austria’s Kurant GmbH on the Europe-wide roll-out of its Bitcoin vending machines.

To expand its footprint in Europe, Kurant has acquired a large number of vending machines and also subsidiaries in Greece and Spain. As a result of its expansion, the purchase of cryptocurrencies is now possible at more than 130 vending machines in Austria, Spain, Italy, the Netherlands, and Greece.

According to DLA Piper, “Kurant is the first Austrian company to focus on the officially registered installation of Bitcoin machines, enabling customers to process Bitcoin purchases easily. The company was founded in 2017 as a spin-off of Coinfinity GmbH’s vending machine activities, which was launched in 2014, and it is now the leading provider of Bitcoin vending machines in Europe.”

DLA Piper’s team was led by Corporate Senior Associate Valerie Kramer and included Partners Maria Doralt, Dimitar Hristov, Stephan Nitzl, and Christoph Urbanek, and Counsels Johanna Holtl, Lothar Farthofer, and Stephan Panic.

On July 2, 2020, CEE Legal Matters reported that Herbst Kinsky had advised Viennese start-up GoStudent GmbH on its EUR 8.3 million Series A financing round, which was led by VC fund Left Lane Capital. We spoke with Felix Ohswald, CEO of GoStudent, to learn more.

CEELM: Please tell us a few words about GoStudent. 

Felix: GoStudent operates an affordable digital school connecting students with the best teachers worldwide for individual or group tutoring sessions. The company offers 6, 12, and 24-month tutoring subscription packages to students in the DACH region today, with imminent plans to expand its footprint to other European markets.

CEELM: Congratulations on raising EUR 8.3 million in this financing round. What is that capital intended for? 

Felix: We plan on further strengthening our position in the DACH region as well as starting our first expansion into the French market. 

CEELM: What were the USPs you put forward that you believe were most attractive to the investors? 

Felix: We build an education infrastructure that allows teachers to become great digital teachers and get the best out of them. The teacher-centric focus is unique in the online learning space, in the past, the focus was too much on open marketplaces rather than building scalable and technological defensible teacher infrastructure. 

CEELM: What was Herbst Kinky’s mandate specifically? What did you retain the firm to advise you on during the financing round?

Felix: Herbst Kinsky advised us throughout the whole process, starting with advising us on the negotiation of the term sheet until finally signing the deal in front of the notary. 

CEELM: Last but not least, why did you retain Herbst Kinsky over other firms?

Felix: Among lawyers, I have the experience that it is difficult to find truly entrepreneurship-oriented lawyers who also see the bigger picture. Herbst Kinsky –and especially Florian Steinhart and Magdalena Wagner, who supported us throughout the deal – clearly showed that and that is why we love working with them and will continue doing so in the future. 

On 15 July 2020 the Austrian Parliament adopted a new FDI screening act (Investitionskontrollgesetz, “ICA“), following the trend to tighten the regulatory framework for foreign investment screening (read more here: Austrian government proposes new FDI screening act). The ICA will enter into force after publication in the Federal Law Gazette. It largely transposes the requirements under the EU FDI Screening Regulation (read more here: A new regulation on FDI screening in Europe).

Under the ICA a (mandatory) filing requirement is triggered if:

• a foreign investor, i.e. non-EU, non-EEA, non-Swiss individual/entity, intends to carry out an investment (directly/indirectly) in an Austrian undertaking. This includes
  • the acquisition of shares reaching/exceeding 10 %, 25 % and 50 % (voting rights);
  • the acquisition of control; and
  • the acquisition of essential/all assets of an undertaking (asset deals),
• the undertaking is active in a sector listed in an Annex to the ICA, and
• the undertaking is Austrian, i.e. has its seat or its central administration in Austria (local nexus).

No approval is required for an investment in an undertaking with i) fewer than 10 employees and ii) an annual turnover or balance sheet total of less than EUR 2m (start-up exception).

The 10 % share threshold (voting rights) applies for investments in certain highly sensitive sectors. These sectors are listed (exhaustively) in Part I of the Annex and include:

1. defence equipment / defence technology;
2. critical energy infrastructure;
3. critical digital infrastructure (in particular 5G infrastructure);
4. water;
5. systems that enable data sovereignty of the Republic of Austria; and
6. research and development in the fields of pharmaceuticals, vaccines, medical devices and personal protective equipment. For this sector, the 10 % threshold is temporarily introduced until 31 December 2022 in light of the COVID-19 crisis.

For investments in other sensitive sectors relevant for public order and/or security the triggering threshold remains at 25 % and 50 % (voting rights). Part II of the Annex contains a non-exhaustive list of these sectors, including:

1. critical infrastructure such as energy, information technology, transport, health, food, telecommunications, etc.;
2. critical technologies and dual use items as defined in Regulation (EC) No 428/2009; these include artificial intelligence, robotics, cybersecurity, quantum and nuclear technology, nano and biotechnology, etc.;
3. supply of critical resources, including energy or raw materials, as well as food security, medicines, vaccines, medical devices and personal protective equipment, etc.;
4. access to sensitive information, including personal data, or the ability to control such information; and
5. the freedom and pluralism of the media.

Other relevant key elements of the ICA are:

• Indirect acquisitions are covered, contrary to the situation under the (former) Foreign Trade Act 2011 (Außenwirtschaftsgesetz).
• While the notification obligation rests primarily with the acquirer, the ICA foresees (in subsidiarity) a reporting obligation for the target company. In addition, the Authority can assume jurisdiction ex officio if it becomes aware of a transaction subject to approval that has not been notified.
• The ICA foresees the possibility of requesting a non-jurisdiction letter (Unbedenklichkeitsbescheinigung) confirming that an investment is not subject to the approval requirement.
• Timing: The one-month Phase I period only starts after a 35-day period within which the EU Commission and/or Member States can comment on the transaction (under the EU Screening Regulation).
• A considerable part of the ICA is devoted to the cooperation mechanism for exchanging information and cooperating with the EU Commission and other EU Member States under the EU Screening Regulation.

The ICA is expected to considerably extend the scope of the old regime under the Foreign Trade Act (Außenwirtschaftsgesetz). A broad range of investments will therefore need to undergo a screening process. This is in line with the general trend of FDI screening instruments being tightened/enacted across the EU fuelled by concerns of buyouts of critical European infrastructure by foreign investors due to the COVID-19 pandemic.

By Volker Weiss, Partner, and Constantin Fladerer, Associate, Schoenherr

Eisenberger & Herzog has helped Austrian Airlines on its receipt of State aid amounting to EUR 150 million from the Republic of Austria.

According to Eisenberger & Herzog, the State aid is part of a financing package with a total volume of EUR 600 million, which includes an equity grant from the parent company Lufthansa of EUR 150 million and a state-guaranteed bank loan of EUR 300 million.

“The EU Commission’s review found that Austria’s proposed State aid complies with EU State aid rules,” Eisenberger & Herzog reports, “because it compensates Austrian Airlines for losses due to global travel restrictions during the corona pandemic from early March to mid-June 2020, which gave the airline no choice but to largely shut down its own fleet during this period. For the purpose of compensating for the damage caused thereby, the Republic of Austria (represented by the COVID-19 Financing Agency of the Federal GmbH – COFAG) Austrian Airlines subordinated loan, which is converted into a grant as soon as it has been determined on the basis of the 2020 annual financial statements by an independent audit firm that the aid does not go beyond the losses suffered in the reference period.

Eisenberger & Herzog’s team included Partner Andreas Zellhofer and Lawyer Florian Sagmeister.

Decision of the CJEU dated 16 July 2020, Rs C 311/18

On 16 July 2020 the European Court of Justice (CJEU) rendered another fundamental decision on the legitimacy of international transfers of personal data (Rs C 311/18):

• What is it about?

In 2013 Maximilian Schrems initiated proceedings against Facebook in which the legitimacy of transfers of personal data from Europe to the USA was contested. In 2015 the CJEU declared the “Safe Harbor” regime unlawful, which covered such data transfers at the that (Rs C-362/14). In response to that ruling Europe and the USA established a new “Privacy Shield” regime for such data transfers. In the continued proceedings the CJEU has again assessed the legitimacy of transatlantic personal data transfers.

• How did the CJEU decide?

In its decision dated 16 July 2020 (Rs C-311/18) the CJEU invalidated the “Privacy Shield”. In summary the CJEU deems the “Privacy Shield” not sufficient because it cannot prevent disproportional data access by US-authorities since US law by itself has no sufficient proportionality restraints. As the “Privacy Shield” does not grant compensating safeguards to Europeans and also because it does not grant actionable rights against such US-authorities the CJEU deemed the “Privacy Shield” invalid. Also, a newly established ombudsman system under the “Privacy Shield” can, in the view of the CJEU, not remediate this deficit.   

• Was it all about “Privacy Shield”?

The CJEU ruled on the legitimacy of Standard Contractual Clauses as well. Such Clauses can be used as an alternative to the “Privacy Shield”. Having said that, personal data can legitimately be transferred to a US-based data recipient beyond the “Privacy Shield” regime if that recipient has concluded a specific contract (the Standard Contractual Clauses). In its decision the CJEU has indeed taken into consideration that the Standard Contractual Clauses, by their contractual nature, cannot enfold binding impact on US authorities. However, the CJEU still affirmed the legitimacy of Standard Contractual Clauses because the Court sees appropriate mechanisms in those Clauses that allow for an immediate interrupt of the data transfer as soon as the data receiving US company cannot properly comply with the Standard Contractual Clauses any more. Yet, the CJEU requires both parties, i.e. the data exporting European company as well as the data importing US company, to assess prior to the envisaged data transfer whether the data importing US company will be able to comply with the duties arising from the Standard Contractual Clauses. Both parties also have to ensure that the data receiving US company informs the data exporting European company anytime of its inability to comply with the Standard Contractual Clauses which shall make the latter suspend its data transfers in such case.

• What does this mean for me?

The impact of that decision is only partially new. The invalidity of the “Privacy Shield” may trigger reactions similar to those that ensued as a result of the invalidity of “Safe Harbor”. European companies, when sharing personal data with US-partners, will again have the option to switch to Standard Contractual Clauses, as many companies did when “Safe Harbor” was skipped. The CJEU’s affirmation of the Standard Contractual Clauses may give additional comfort in that respect. A new aspect, however, is the CJEU’s postulate that the companies will now have to more comprehensively align themselves on whether the Standard Contractual Clauses can effectively be honored by the US partner as this has been done in recent practice.

• How should I react?

1. Check whether you are transferring personal data to US companies (note that this is the case in almost all commonly used cloud solutions).

2. Check whether your US partner is a “Privacy Shield” certified company: https://www.privacyshield.gov/list

3. If so, contact your partner and check the option to switch to Standard Contractual Clauses. Note that the CJEU asks you and your US-partner to align on whether your US-partner can sufficiently honor the Standard Contractual Clauses and keep records on this alignment.

4. Check the general terms of your company’s international personal data transfers and whether you have adequate data protection safeguards in place to cover those transfers.

5. Keep monitoring the developments on the “Privacy Shield”.

By Gunther Leissler, Partner, Schoenherr

BPV Huegel has advised Immofinanz on a combined share placement and the first-to-market issue of subordinated mandatory convertible notes. Linklaters and Weber & Co. advised bookrunners J.P. Morgan Securities plc, Sole Global Coordinator, and Erste Group Bank AG and Raiffeisen Centrobank AG.

Both placements together comprised approximately 20 percent of the share capital and were carried out in parallel by way of accelerated book-building procedures with institutional investors under exclusion of the shareholders’ subscription rights.

The placement included new shares from authorized capital, as well as treasury shares. The shares were priced without discount to the last closing price on the Vienna Stock Exchange. At the same time, Immofinanz issued 4% subordinated mandatory convertible notes with a total nominal value of EUR 120 million, initially convertible into 6,998,228 shares.

Immofinanz is a commercial real estate group focusing on the office and retail segments of Austria, Germany, Poland, the Czech Republic, Slovakia, Hungary, and Romania. Its real estate portfolio is valued at approximately EUR 5.1 billion and covers more than 210 properties.

BPV Huegel’s team was led by Partner Christoph Nauer and included Partner Kornelia Wittmann, Attorneys at Law Roland Juill, Daniel Reiter, and Nicolas Wolski, and Associate Barbara Valente.

Linklaters Frankfurt-based team consisted of Partners Peter Waltz and Marco Carbonare, Senior Associate Fran Albers-Schonberg, and Associate Tosan Kraneis.

Weber & Co’s Vienna-based team was led by Partner Christoph Moser.

Eisenberger & Herzog has advised the Switzerland’s Brisen Group on its entrance into an operating agreement with the Mandarin Oriental hotel chain.

According to Eisenberger & Herzog, the Brisen Group acquired the premises of the former commercial court on Riemergasse, in Vienna, in 2016, with plans to transform it into a five-star hotel by 2023. In doing so, the firm reports, the Brise Group will invest “more than EUR 100 million in the expansion and comprehensive modernization of the former court building. A total of 151 rooms and suites, a top-class restaurant, a spa area with swimming pool and fitness center, and banquet and conference facilities will be created for the Mandarin Oriental hotel [over] approximately 17,000 square meters of floor space.“

Eisenberger & Herzog‘s team included Partners Alric Ofenheimer, Christopher Engel, Marcus Benes, Laurenz Liedermann, Ulrike Sehrschoen, and Andreas Zellhofer, Attorney Karoline Hofmann, and Associates Helena Neuner, Wolfgang Koefer, Josef Moser, and Titus Kahr.

Eisenberger & Herzog was unable to provide more information on the matter.

Eisenberger & Herzog, working alongside Peters, Schonberger & Partner, has advised Vetter Pharma on its acquisition of a clinical production facility in Rankweil, Austria.

Vetter manufactures aseptically pre-filled injection systems. With the new location in Austria, a counterpart to an existing clinical production facility near Chicago, the company is expanding its presence in Europe and investing in additional capacities to meet growing global demand.

Eisenberger & Herzog’s team consisted of Partners Alric Ofenheimer, Clemens Lanschutzer, Ulrike Sehrschon, and Judith Feldner, and Trainee Lawyers Joseph Moser, Niklas Nigl, and Sophie Bara.

The Peters, Schonberger & Partner team included Partner Henning Blaufus and Lawyer Teresa Hemmeter.

Eisenberger & Herzog did not reply to our inquiry on the matter.