Category: Belarus

Cobalt has advised Mangrove Capital Partners on its investment in mobile app Flo, a pregnancy calculator, ovulation calendar, and menstrual cycle tracker.

Mangrove Capital describes itself as “a contrarian, bold but patient venture capital firm helping innovative entrepreneurs start and grow global, disruptive companies,” and it says that “we chase transformational ideas around the world, with a focus on Greater Europe.”

Cobalt’s role was to conduct legal due diligence on the Belarusian developer of the mobile app, as well as to develop assurances and guarantees for the parties.

Sorainen has advised the EBRD on Belarusian law matters in connection with the lending of USD 15 million to the Modern-Expo group.

The Modern-Expo group was founded in 1993, and Sorainen describes it as, “one of the largest manufacturers and suppliers of fixtures in Central and Eastern Europe.” The list of its clients includes such major international retailers as Auchan, Carrefour, Billa, and Nestle.

The seven-year loan will be used to increase production volumes at the company’s two principal manufacturing sites in Lutsk, Ukraine, and in Vitebsk, Belarus, as well as to restructure the group balance sheet.

The Sorainen Belarus team included Senior Associates Ann Laevskaya and Aliaksei Daryin, Legal Assistant Artem Melnikovich, and Country Managing Partner Kiryl Apanasevich.

Sorainen explained that it was unable to disclose the identity of counsel for Modern-Expo. 

Sorainen Belarus has advised Baltic Beverages Holding, a member of the Carlsberg Group, on the acquisition of an additional 10.5% stake in the Alivaria brewery from the EBRD.

According to Sorainen, Alivaria is Belarus’ oldest brewery, and it owns the most diverse portfolio of beer and kvass brands in Belarus.

Sorainen Belarus previously advised the Carlsberg Group on its acquisition of a majority stake in Alivaria.

The Sorainen team was headed by Senior Associate Viktoryia Mikhnevich.

Sorainen has advised Zubr Capital and the EBRD in their equity investment in the Targetprocess company group, a Belarusian developer of Agile-based project portfolio management systems.

With offices in Belarus, the USA, Germany, and the UK, Targetprocess provides IT solutions to over 1,000 companies worldwide.

Zubr Capital is the first professional private firm managing private equity funds in Belarus. Targetprocess will form part of the Zubr Capital Fund I portfolio.

The EBRD invested through the Venture Capital Investment Programme, a facility specializing in direct equity investment in early and growth-stage technology companies. According to Sorainen, the program “targets innovative companies with clear vision and potential from countries across the Baltics, Central and Eastern Europe, and other Eurasian regions.”

The Sorainen team was headed by Country Managing Partner Kiryl Apanasevich and Senior Associate Viktoryia Mikhnevich.

Sorainen informed CEE Legal Matters that it was not able to provide any additional information.

Sorainen has advised the world’s largest inland port, Duisburger Hafen, on its acquisition of a shareholding in the Industrial Park Development Company ⎯ the management company of the Great Stone China-Belarus industrial park.

Sorainen’s assistance included representing Duisburger Hafen in negotiations with the Great Stone administration over share purchase agreements with the sellers, drafting transactional documents, advising on antimonopoly aspects of the transaction, and overseeing the signing and closing process. This was the first transaction in Belarus with state-owned shares executed under non-Belarusian law. According to Sorainen, “it was also a gateway transaction for Duisburger Hafen AG to commence large scale investments that are to change the landscape of the country’s transport and logistics infrastructure.”

Dusseldorf’s Tradeo LLP law firm served as German advisor to Duisburger Hafen.

The Sorainen team consisted of Partner Maksim Salahub, Senior Associate Viktoryia Mikhnevich, and Associate Aliaksei Vashkevich.

“Among the biggest challenges in Belarus is the bureaucratic approach at all levels of state bodies that hinders new approaches,” says Olga Nikolaeva, Partner at Vlasova Mikhel & Partners in Minsk. “Officials’ abusive interpretation of the laws negatively affects business-related legislation too, even when we have norms.”

“It is hard to prove to state bodies that the law has to work the way it is written and not the way it is understood by officials,” Nikolaeva explains, although she notes that this it not a new problem in Belarus. According to her, a typical example is the confiscation of goods heading to Russia from Europe, where Belarus is a transit point. Much of the time, she says, the confiscation is based on what she describes as “insignificant violations” in documents — even though Belarus is a member of the Customs Union, which obligates the country of destination to deal with violations.

Still, there’s some improvement in the area, Nikolaeva says, pointing to the January 31, 2018 entrance into force of the amended Code of Administrative Violations, which now limits the number of cases when confiscation may occur. Still, she says, “the officials still interpret this legislation in their own way and continue confiscation as they did before.” While she says the new law should eventually have a positive effect, she believes the existing problem is not about a lack of regulation, but rather the benefits the officials seek. “Our customs bodies that are supported by courts look at seizing the goods as an opportunity to increase the state budget,” she says. “Therefore the interpretation of the legislation is done in a hurtful way with no connection to its real content.” 

Switching to another topic, Nikolaeva gets more optimistic. “Belarus is going through a very interesting stage, as a group of new laws related to IT is in process.” She says the new legislation will allow foreign investors to establish new businesses in the IT field, and she adds that “if everything will be as we foresee in our optimistic plans, then Belarus will be an island of freedom in the IT field where it will be comfortable and easy to do business.” She admits that, as the legislation is under development, at the current stage it is hard to tell what to expect. “However, this is a huge step in the new direction in our modern world, and indeed it is a breakthrough.”

Nikolaeva comments on the increased interest of lawyers in the IT sphere too, and reports an increase in IT-related litigation. She sighs, adding that, “some of our judges do not know how to use computers, and for them to understand the meaning of the code for application is still challenging.” Yet, she believes, with repeated and frequent IT disputes, judges will eventually get acquainted with the area. In addition, she says, the IT sphere is very attractive to the younger generation of lawyers, who often get involved in such cases pro bono.

Sorainen has assisted Baring Vostok Private Equity Fund V with the acquisition of a minority stake in Belarusian software developer Itransition.

Baring Vostok Capital Partners is an independent private equity firm focused on investments in Russia and the Commonwealth of Independent States.

The Sorainen team was led by Belarus Country Managing Partner Kiryl Apanasevich and Senior Associate Viktoryia Mikhnevich. In response to an inquiry about counsel for Itransition, Sorainen explained that it was “not in the position to disclose any other information on the deal.”

Vlasova Mikhel & Partners has helped the China Development Bank set up a new representative office in Minsk.

According to VMP, the he representative office — which was officially registered on June 5, 2018 — “is established to study the possibilities of developing trade and economic relations and expanding cooperation between countries.”

The China Development Bank, which was founded on July 1, 1994, focuses primarily on supporting the core industries of the Chinese economy, promoting the development of specific areas, and constructing the necessary infrastructure. In addition, the bank is involved in the implementation of major infrastructure projects in China and outside the country.

The Republic of Belarus has been cooperating with China Development Bank since 2008. In Belarus the bank financed a number of investment projects, including the construction of the Vitebsk hydropower plant, a potash mining and ore-dressing complex, a cardboard production facility, and a number of other Belarusian-Chinese investment projects. VMP reports that it supported these projects as well.