Category: Czech Republic

Dvorak Hager & Partners has represented Cool Credit, s.r.o. in its registration in the register of non-bank consumer credit providers with the Czech National Bank.

The Czech Republic’s new Consumer Loan Act was introduced in the beginning of 2016, tightening entry requirements for the credit market. Cool Credit met the requirements of the act and received a license from the Czech National Bank (CNB). The license is granted for a limited period of five years, with an option for renewal for another 60 months upon payment of an administrative fee.

The Dvorak Hager & Partners team was led by Partner Lukas Zahradka and included Attorneys Katarina Jendzelovska and Vojtech Faltus.

Dentons has advised PFNonwovens Inc., a member of the Prague-based R2G Rohan nonwovens group, in connection with its agreement to acquire First Quality Nonwovens Inc. and First Quality Nonwovens (Wuxi) Co., Ltd., an American and a Chinese manufacturer of nonwovens for consumer, health care, and industrial products. The seller, First Quality Enterprises, was represented by Wachtell Lipton, Rosen & Katz.

Dentons also advised PFNonwovens and the R2G Rohan group on the financing of the acquisition, which was provided by Ceskoslovenska obchodni banka, a. s. and KBC Bank N.V., New York branch. The banks were represented by White & Case.

The transaction, which would represent the largest outbound investment ever made by a Czech group in the United States, is subject to customary closing conditions, including receipt of all relevant regulatory and antitrust approvals.

The Dentons M&A team was co-led by Partners Rob Irving and Ilan Katz, supported by a team of more than 30 lawyers across 11 Dentons offices in the US, Europe, UK, and Asia. The team included, among others, Partners Tim Santoli, Michael Maryn, Joel Bock, Matt Adams, and Danette Davis, Senior Managing Associate Adam Dunst, Managing Associate Asher Bundlie, and Associate Greg DiBella, with the help of Partners Frank Niu and Kaiming Cai and Counsel Susan Wang, as well as Partnjirier Alex Tan and Associate Lim Yu Herng. Partner Rob Irving also led Dentons team on the financing of the acquisition, supported by Prague-based Partner Jiri Tomola and New York-based Partner Lee Smith, with Associate Martin Manduľak.

White & Case did not reply to our inquiries on the matter.

Weinhold Legal has advised Cryptelo on the preparation and successful implementation of the issue of its own cryptographic CRL via an initial coin offer. The public phase of the ICO ended on April 30, 2018.

Cryptelo deals with the encryption of data for the commercial sphere with the highest level of security. The resources obtained through the ICO will be used to further develop its products.

The Weinhold Legal team was led by Partner Martin Lukas, working in cooperation with Attorney-at-law Vladimir Petracek and Associate Lawyer Matej Vecera.

Clifford Chance has advised the Cromwell Property Group on its entrance into a strategic partnership with Linkcity to invest in the roll-out of a portfolio of logistics and light industrial assets in Central and Eastern Europe. Linkcity was advised by Wilsons.

According to Clifford Chance, the portfolio targets an eventual gross asset value of EUR 500 million. The assets, representing more than 25 percent of the portfolio (by value), have already been identified: the first is an 8,000 square meter logistics building in Hradec Kralove, around 100 kilometers east of Prague. The facility is already 88 percent pre-let and due to be completed in summer 2018.

The larger second and third assets to be part of the portfolio, which cover a combined 180,000 square meters, are currently also seeking pre-let commitments.

Linkcity is a member of Bouygues Construction, a global construction company. Bouygues affiliate companies Linkcity and VCES will be responsible for the project development, design, and construction of the portfolio, while Cromwell will source investment funding and subsequently provide asset management services upon the completion of each project.

The Clifford Chance team was led by Prague Partner Emil Holub with Senior Associate Milan Rakosnik. The team also included London-based Partners Ian Painter and Sandy Hall and Associate Tom Ward and Prague-based Associates Josef Lysonek, Tereza Rehorova, and Ludvik Ruzicka.

The Wilsons team consisted of Partners Bryan Wilson and Robert Danis and Associate Zuzana Bury.

Schoenherr Prague has advised EVO Payments International on the creation of a long-term strategic alliance with Moneta Money Bank for payment acceptance services to the bank’s retail customers. Weil, Gotshal & Manges advised Moneta Money Bank on the deal.

EVO Payments International is a payments service provider of merchant acquiring and processing solutions for retail customers, financial institutions, government organizations, and multinational corporations located throughout North America and Europe.

Moneta Money Bank is an independent Czech bank with shares listed and traded on the Prime Market of Prague Stock Exchange since 2016.

According to Schoenherr, EVO announced at the end of April that it would provide Moneta retail customers with “a wide range of secure payment processing services, innovations in digital transactions, and advanced technologies to support the bank’s strategic growth objectives in commercial banking.” 

The Schoenherr team consisted of Partners Vladimir Cizek and Volker Weiss, Senior Associates Jitka Kadlcikova, Natalie Rosova, and Denisa Assefova, Associate Rudolf Bicek, and Junior Associate Claudia Bock.

The Weil team consisted of Partners Karel Muzikar and Karel Drevinek, Senior Associate Pavel Grim, and Associate Ivo Trojan.

Weinhold Legal has advised Zdenek Rinth on the sale of 90% of Kara Trutnov a.s. shares to the C2H group, which belongs to a Czech private investor Michal Micka. Rinth retains the remaining 10%. Financial details were not disclosed, though a Weinhold Legal spokesman confirmed published reports that it was “lower hundreds of millions of CZK.”

Kara Trutnov is a traditional Czech brand of leather and fur products.

The Weinhold Legal team was led by Partner Ondrej Havranek, working in cooperation with Managing Associate Dalibor Simecek and Senior Associate Vladimir Petracek.

Weinhold Legal explained that it was not at liberty to disclose the identity of counsel for the buyer. 

White & Case has advised cybersecurity provider Avast on its USD 816.6 million initial public offering. The joint bookrunners — UBS, MS, BAML, Jeffries, Credit Suisse, Key Banc, and Barclays —were represented by Latham & Watkins.

Avast was admitted to the Premium Listing Segment of the Official List and the Main Market of the LSE. The USD 816.6 million offer size, priced at 250 pence per share, includes gross primary proceeds of around USD 200 million and represents 25.3% of the shares in Avast.

Its market capitalization at the commencement of conditional dealings is approximately USD 3.231 billion, and according to White & Case, “it is the biggest ever software IPO on the London Stock Exchange.” 

“Our relationship with Avast has gone from strength-to-strength in recent years,” said White & Case Partner Ian Bagshaw, who co-led the firm’s deal team. “We advised the company on a number of key transactions, including its USD 1.3 billion acquisition of AVG Technologies N.V. as reported by CEE Legal Matters on October 17, 2016, the initial private equity investment by Summit Partners in 2010, the minority investment by CVC Capital Partners in 2014 as reported by CEE Legal Matters on February 7, and its recent acquisition of Piriform. Advising Avast on a London IPO of this magnitude and strategic significance has been hugely exciting, and is another milestone in our relationship with this ambitious and successful company as it begins the next chapter in its exciting growth story.”

Avast is headquartered in Prague, and it has offices in the USA, Germany, China, South Korea, and Taiwan. It is the global leader in digital security products, with more than 435 million users worldwide.

The White & Case team advising on the transaction was co-led by Partners Ian Bagshaw, Jonathan Parry, and Jill Concannon (in London), and included Partners Jan Andrusko (in  Prague), Guy Potel, Steven Worthington, Prabhu Narasimhan and Justin Wagstaff (in London), and London Associates Lucy Bullock, Helen Levendi, Marissa Florio, Alexander Underwood, Kelley Trueman, Will Summers, Elena Ruggiu, and Disha Chandrachud.

The Latham & Watkins team included Partners Brett Cassidy and James Inness.

Editor’s note: After this article was published, Kinstellar announced us that they advised the underwriters of the IPO. The joint global co-ordinators were Morgan Stanley and UBS Investment Bank, the joint bookrunners Barclays, BofA Merrill Lynch, Credit Suisse, and Jefferies, KeyBanc Capital Markets acted as co-lead manager, while the financial adviser was Rothschild. Kinstellar’s team was led by Partner Jan Juroska, and further included Counsel Martina Brezinova, and Junior Associates Jakub Stastny and Michal Matous.

CMS Prague has announced that Libor Prokes was promoted to Partner on May 1, 2018. Prokes focuses on real estate transactional work, including property sales and acquisitions, as well as leasing and constructions matters.

Prokes joined CMS Prague with two colleagues from Wolf Theiss in May 2017 as reported by CEE Legal Matters on May 10, 2017. He has also worked with Noerr in Prague and Bratislava.

Prokes received his doctorate in law at Charles University in Prague and was admitted to the Czech Bar Association in 1998.

White & Case has announced a change in the leadership of its Prague office, effective June 1, 2018.

Petr Panek, a partner in the firm’s global M&A practice who joined White & Case in 2003, has been appointed Office Executive Partner in Prague. He succeeds David Plch, a partner in the Global Banking practice, who joined White & Case in 1997, and who has led the Prague office since 2013.  Alongside continued legal advice for clients, Plch is taking on broader leadership responsibilities in the firm’s banking practice in EMEA. He will continue to be based in Prague.

According to White & Case, Panek “advises clients on a number of issues relating to financial and real estate transactions. He concentrates on M&A, real estate deals, fund formation, financial restructurings, dispute resolution, and regulatory matters associated with collective investments, including investment funds.” He is a member of the Czech Bar Association and the New York State Bar. He received his Masters in Law from the Columbia University School of Law in New York and his Doctorate from Charles University in Prague.

Plch, according to White & Case, “advises clients on financing, financial restructuring, and insolvency matters. He has experience in representing financial institutions, as well as major corporate and private equity clients throughout Europe, Asia, and North America.” He is a member of the Czech Bar Association, and he received his Doctorate in Law from the Faculty of Law of Masaryk University He also studied International Business Law at the University of Toronto.  

The practice of the Czech Competition Authority in question.

The legality of a 2003 dawn raid carried out by the Czech Competition Authority (“CCA”) on Delta Pekárny’s business premises was the subject of a long-running dispute.

The CCA has the power to inspect business premises without any prior judicial warrant (a court order is only needed to inspect private premises). Czech procedural law afforded the implicated companies two procedural options to challenge the legality of the raid – one requiring the CCA to terminate the administrative proceedings without finding an infringement, the other requiring the company to await the final decision on the infringement. In 2014, the ECoHR found such an ex-post review to be ineffective, since it is not sufficiently immediate.1 As a consequence, the Delta Pekárny dawn raid was considered illegal. Also, the review of the case before the Czech Constitutional Court was re-opened.

Immediate consequences of the ECoHR decision – bringing dawn raids to a temporary halt.

The ECoHR decision was a significant blow to the CCA. It put all planned dawn raids on hold for several months in order to evaluate the judgment and to look for a solution in order to resume dawn raids. The initial understanding of the CCA after the ECoHR decision was that the CCA could perform dawn raids only with prior judicial approval, unless a legislative change was made. At the beginning of 2015, the tide turned and the CCA resumed dawn raids, claiming that the CCA’s analysis showed that no prior judicial approval would be necessary. The Delta Pekárny judgment was believed to be an isolated one based on several peculiarities of the case without the possibility or need to infer general conclusions, and the CCA did not identify a systemic problem in the Czech legal system. The CCA claimed that the legal system offered sufficient immediate legal protection to challenge the legality of a raid, particularly through a specific administrative action (the socalled action against illegal interference of an administrative body, “separate administrative action”). However, the case law and legal interpretation at that time allowed such an action to be filed only if a final decision on the infringement was issued.    

The decision of the Czech Constitutional Court and legislative changes.

In the re-opened case on the Delta Pekárny dawn raid, the Constitutional Court considered the raid illegal in February 2016, siding with the ECoHR that the Czech legal system afforded insufficient protection of fundamental rights.

In order to bridge the legal uncertainty after the statements of the CCA and the decision of the Czech Constitutional Court and to guarantee sufficient immediate protection of fundamental rights in compliance with EU requirements, changes were introduced in the applicable legislation whereby it was explicitly stated that any company can file a separate administrative action to challenge the legality of a dawn raid. The separate administrative action must be filed within two months of the inspection, irrespective of the status of the infringement proceeding.

By Claudia Bock, Attorney at Law, Schoenherr