CEE Legal Matters

Category: Bulgaria

  • CMS and Wolf Theiss Advise on Largest Deal Ever in Bulgarian Automotive Industry

    CMS and Wolf Theiss Advise on Largest Deal Ever in Bulgarian Automotive Industry

    CMS has advised Hugo Pfohe GmbH on the legal aspects of a competitive tender to sell Bulgaria’s Moto-Pfohe Group, with Wolf Theiss advising the winning bidder, the Sumitomo Corporation.

    CMS describes the deal as the largest ever in the automotive sector in Bulgaria, and as “substantial for the market as a whole.” 

    According to a Moto-Pfohe press release, the company is “the official representative of Ford, Volvo, Jaguar and Land Rover in Bulgaria, [and] is the most successfully developing automotive company in the country and industry leader for the last 26 years. With the acquisition by Sumitomo Corporation the Moto-Pfohe Group becomes part of one of the largest integrated trading and investment groups in the world, with a 400 year history and offices in 65 countries. This is a huge step forward for Moto-Pfohe, providing the company with new opportunities for further growth and intensive development of its potential in order to reach even greater success in the future. With recognition of the excellent image, eminent financial stability and progressive business achievements of the company, the name Moto-Pfohe, its management and structure remain unchanged after the ownership change.

    CMS reports that “the seller was committed to bringing the best possible strategic investor for the business. Therefore, it organized a very competitive and transparent tender, which resulted in participation of European and world leaders in the sector, awarding the winning bid to Sumitomo Corporation, one of the largest integrated trading and investment groups with a 400 year history, USD 69 billion assets, and around 800 group companies.”

    UniCredit Bulbank was the investment and financial adviser to Hugo Pfohe, and Deloitte Bulgaria provided investment and financial advice to Sumitomo Corporation.

    The CMS team was led by Partners Atanas Bangachev and Kostadin Sirleshtov, assisted by lawyers Veliko Savov, Valentina Santambrogio, Jenia Dimitrova, Dimitar Dimitrov, Iveta Manolova, Desislava Vasileva, Alexander Rangelov, and Angel Naydenov.

    The Wolf Theiss team was led by Partners Richard Clegg and Anna Rizova, supported by Associates Jasmina Uzova, Hristina Dzhevlekova, Atanas Mihaylov, Petko Atanasov, and others.

     

  • CMS, A&O and Spasov & Bratanov Advise on Financial Restructuring for ACWA Power/Blackstone Renewable Investment in Bulgaria

    CMS, A&O and Spasov & Bratanov Advise on Financial Restructuring for ACWA Power/Blackstone Renewable Investment in Bulgaria

    CMS has advised the investors of Acwa Power CF Karad PV Park EAD — a joint venture of Acwa Power, Blackstone, and the Clean Energy Transition Fund (which itself includes the EBRD and the European Investment Bank, among others, as partners) which owns one of the largest photovoltaic power plants in Bulgaria — on the restructuring of its debt. Allen & Overy (as international legal counsel) and Spasov & Bratanov (as Bulgarian legal counsel) advised lenders IFC, OPIC, Unicredit London, and Unicredit Bulbank on the matter.

    According to CMS, “the deal follows a series of refinancing deals for the renewable energy producers in the country and includes amendments to the main facility agreements, and to the local security package. Post-restructuring, CMS will be assisting the JV on the completion of a debt-to-equity conversion in the borrower’s capital.”

    CMS’s team included Partner Kostadin Sirleshtov, Senior Associate Jenia Dimitrova, and Associates Desislava Vasileva, Dimitar Dimitrov, Konstantin Stoyanov, Raya Maneva, and Zornitsa Stoykova.

    The New-York based Allen & Overy team was led by Partner Sami Mir and coordinated by Associate Jacob Reed.

    The Spasov & Bratanov team was led by Partner Vassil Hadjov and included Counsel Nadia Hadjova and Associate Borimir Tonchev.

     

  • Penkov, Markov & Partners Advises CEZ on Sale of Varna Power Plant

    Penkov, Markov & Partners Advises CEZ on Sale of Varna Power Plant

    Penkov, Markov & Partners, working alongside Weil, Gotshal & Manges, has advised CEZ on the sale of Bulgaria’s hard coal-fired thermal power plant in Varna to Bulgarian company SIGDA OOD.

    TPP Varna, with an installed capacity of 1260 MW, has been shut down since January 2015. CEZ accepted the offer of SIGDA OOD as the best received in the tender. The transaction remains subject to approval of the Bulgarian antimonopoly authority, and the final purchase price will be determined as of closing of the transaction based on the level of working capital.

    The Penkov, Markov & Partners team led by Partners Ivan Markov and Svetoslav Dimitrov continues to assist CEZ in connection with merger clearance aspects of the transaction.

  • DGKV Advises Fund of Funds on Investments in Urban Development

    DGKV Advises Fund of Funds on Investments in Urban Development

    DGKV has advised Fund Manager of Financial Instruments in Bulgaria EAD on the structuring and launching of a EUR 180.5 million public procurement procedure to select financial intermediaries for the Urban Development Fund under the Operational Program “Regions in Growth 2014-2020,” which is co-financed by the European Structural and Investment Funds. 

    According to DGKV “through this innovative for Bulgaria financial instrument, the Fund Manager of Financial Instruments in Bulgaria EAD (the ‘Fund of Funds’) aims to improve access to financial resources in the regions, multiplying public resources by attracting private capital for investments creating economic growth. The allocated funds shall be provided for financing and guaranteeing certain losses in connection with the financing of eligible investment projects under conditions of shared risk. The resources shall be concentrated in the areas covering urban development, energy efficiency, tourism, and cultural heritage. The Priority Axes on which the funds shall be invested are ‘Sustainable and Integrated Urban Development’ — Axis 1/PA1/ — and ‘Regional Tourism’ — Axis 6. The financial intermediaries shall have to provide co-financing with private resources for at least 30% of the total amount of funding. The deadline for submission of applications by financial intermediaries is December 29, 2017.”

    DGKV’s work on the project included preparing an operational agreement (i.e., a public procurement contract) and preparing legal opinions on the drafts of public procurement documents prepared by the Fund of Funds for conducting the procedure for the selection of financial intermediaries for the implementation of the financial instrument. 

    The firm’s team on the project was led by Partner Georgi Tzvetkov and included Senior Associates Gergana Monovska and Anton Krustev and Associates Lora Aleksandrova and Tsvetelina Bayraktarova. 

  • Burden of Costs in Civil Litigation in Bulgaria

    The burden of costs in litigation has always been of great importance to people and companies deciding whether to bring a civil action. 

    Under Bulgaria’s current Civil Procedure Code (CPC), litigation costs include the state fee, lawyers’ fees, deposits for expert opinions appointed in the trial, fees for calling witnesses, and costs for obtaining interim measures. Litigation costs do not include the costs of translations, certifications, and legalization of documents, collection and examination of evidence, utilities, travel expenses, preliminary legal opinions, and so on. 

    The basic principle in Bulgarian civil procedure law is that the losing party pays the litigation costs of the winning party, proportional to the accepted part of the claim. Each court instance is obliged to rule on the issue of costs in its judgment, and according to the established case law of the Supreme Court of Cassation of the Republic of Bulgaria (SCC), before the final hearing in each respective court instance each party must present the Court with a comprehensive list of its litigation costs – including lawyer’s fees – and evidence of actual payment. If a party fails to provide such a list, or fails to demonstrate actual payment, the Court will reject the claim for costs as unproven and the party will not have the right to seek an amendment of the judgment in this part.

    The costs section is also an enforceable part of the court’s judgment. In order to pursue reimbursement of awarded costs, the party seeking them should obtain from the Court a writ of execution and initiate an enforcement case with a judicial enforcement officer (bailiff). Costs incurred within the enforcement case, such as bailiff’s fees and attorney’s fees, are also collectable from the debtor.

    Unlike the state fees and the deposits for expert opinions and witnesses, which are both explicitly defined by law or by the Court, lawyer’s fees may be disputed as excessive by the opposite party. Objection may be filed until the last hearing in the respective court instance. The main criteria is whether the claimed fees correspond to the factual and legal complexity of the case. The Court, at its discretion, can decide to reduce the claimed lawyer’s fees as excessive. However, all Courts have to comply with the statutory case law of the SCC, according to which the lawyer’s remuneration cannot be reduced below the minimum amount stated in special Ordinance 1 of 2004 on the minimum amounts of attorney fees (promulgated in the Official Gazette by Issue 64/2004).

    It is worth noting that the current CPC provides several exceptions to the basic principle on distribution of burden of litigation costs. The first exception depends on the outcome of the case, as each party has the right to claim its costs in accordance with the accepted or rejected part of the claim. The second exception depends on the behavior of the parties, as, if the defendant did not cause the litigation and acknowledges the claim, the costs are borne by the plaintiff, even though the decision is favorable to him. Another exception to the principle involves termination of the case due to refusal or withdrawal of the claim, procedural violations, non-payment of the state fee, inadmissibility of the claim, and so on, in which case the defendant’s costs should be borne by the plaintiff. In case of a court settlement, the parties may agree to split the costs. In such case, the Court reimburses 50 percent of the paid state fee to the plaintiff.

    The Bulgarian CPC does not recognize the funding of litigation costs by outside third parties (which is allowed in the U.S., for example), but the parties have the option of purchasing litigation expenses insurance under the Bulgarian Insurance Code if the estimated cost amount is significant.

    By Antonia Kehayova, Head of Dispute Resolution, CMS RRH Sofia

    This Article was originally published in Issue 4.8 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

  • Bangachev Rejoins CMS Bulgaria to Head Public Procurement Practice

    Bangachev Rejoins CMS Bulgaria to Head Public Procurement Practice

    CMS has announced that senior energy lawyer Angel Bangachev has rejoined the firm from Tsvetkova Bebov & Partners and will lead CMS’s Public Procurement Practice in Bulgaria.

    Bangachev, who brings colleague Diyan Georgiev with him from Tsvetkova Bebov & Partners (TBP), worked with CMS for eight years before leaving for TBP 20 months ago. According to CMS, “he brings back to CMS his wealth of knowledge and experience in the fields of renewables, public procurement, oil & gas and regulatory, among others.”

    Kostadin Sirleshtov, who sits in Sofia and coordinates the Central and Eastern European practice of CMS in the fields of Energy, Projects, and Construction comments: “This is excellent news for our Energy practice in Sofia and in CEE! Angel is an brilliant energy lawyer and a colleague with deep understanding of the core values of CMS. He is well known across CMS and is highly appreciated by colleagues and clients. We are particularly delighted that he also brings new talent to our organization.” 

  • Borislav Boyanov Signs Memorandum of Cooperation with the Ministry of the Bulgarian Presidency of the EU Council

    Borislav Boyanov Signs Memorandum of Cooperation with the Ministry of the Bulgarian Presidency of the EU Council

    On November 1, 2017, Lilyana Pavlova, the Minister in charge of the Bulgarian Presidency of the EU Council and Boyanov & Co. Managing Partner Borislav Boyanov, the President of the Association of the Honorary Consuls in Bulgaria and Honorary Consul of Malta, signed a Memorandum of Cooperation for the forthcoming Bulgarian Presidency of the European Union. 

    According to a Boyanov & Co. press release, “the Memorandum aims to strengthen relationships and establish close collaboration in order to ensure the best representation of Bulgaria and support the government in attaining the supranational EU goals set out for the Bulgarian EU Presidency mandate which starts in January 2018. Bulgaria will hold the rotating presidency for a first time and joint efforts will be directed to promote its image of a country with significant potential and extensive opportunities for foreign investment and development of tourism. The Association of the Honorary Consuls will provide support for the preparation work and activities, the implementation and popularization of the priorities and accomplishments of the Bulgarian Presidency through exchange and dissemination of information, expert advice and consultations, studies and analyzes, as well as participation in events on the Presidency calendar.”

    The Association of Honorary Consuls in Bulgaria was established in 2004 in Sofia and works in cooperation with the European Association of Honorary Consuls based in Brussels.

  • Boyanov & Co. Consults BSP PLC on Acquisition of Historic Building in Sofia

    Boyanov & Co. Consults BSP PLC on Acquisition of Historic Building in Sofia

    Boyanov & Co. had supported the UK-listed company BSP PLC on its acquisition of a historic building at the corner of Rakovski Str. and Ivan Vazov Str. in the heart of Sofia.

    According to Boyanov & Co., the “iconic building … was designed in the beginning of the 20th century by famous architect Nikola Lazarov and is registered as an architectural monument. Its last owner, UniCredit Bulbank, acquired the building after the double merger of HVB Biochim and Hebros Bank (the legal side of that merger was handled by Boyanov & Co.) several years ago.”

    Boyanov & Co. reports that BSP PLC plans to refurbish the building to further develop and increase its value as a vital element of Sofia’s dynamic business center.

  • Hristov & Partners Promotes Biliana Shagova to Partner

    Hristov & Partners Promotes Biliana Shagova to Partner

    Hristov & Partners has promoted Biliana Shagova to Partner.

    Shagova, who joined Hristov & Partners as Counsel in 2015, focuses on commercial and corporate matters, employment, and social and health security. According to Hristov & Partners, “Biliana has extensive experience in advising on complex, high value corporate deals and multi- jurisdictional M&A and commercial transactions in Bulgaria and in the South-East Europe region, with particular expertise in the energy sector, including on the Belene Nuclear Power Plant project.”

    Partner Pavel Hristov commented: “This is well-deserved. Biliana’s promotion materializes our basic concept that each of our counsel is a partner material and at the right time every one of them will become one of our partners. Our firm has enjoyed a strong record of deals over the last three-four years and we continue to grow, committed to deliver the highest quality of work to our clients.”

  • DGKV Advises China Eximbank on Financing of Bulgarian Development Bank

    DGKV Advises China Eximbank on Financing of Bulgarian Development Bank

    DGKV has acted as local counsel to the Export-Import Bank of China with regard to a EUR 50 million loan facility extended to the Bulgarian Development Bank for on-lending to customers in the form of mid or short-term trade financing transactions.

    According to DGKV, the funds will be used to support Bulgarian enterprises, to finance commercial operations, and to support the economic cooperation between Bulgaria and China. This is the first facility agreement between the two institutions following the Financial Cooperation Agreement they entered into in 2014, which envisages joint financing of key projects or areas.

    DGKV advised on matters of Bulgarian law related to the facility agreement and the due diligence exercise of Bulgarian Development Bank, including on the matter of government support and state aide clearance. The firm’s team was led by Partner Nikolai Gouginski, assisted by Senior Associate Kaloyan Krumov and Associates Dimo Staykov, Lora Aleksandrova, Vladislav Antonov, Simeon Vachev, and Vlada Tsenova.

    Image source: bbr.bg