Category: Czech Republic

Orrick has advised Mews’ existing investor Salesforce Ventures on the company’s recently announced Series C round of USD 185 million. Eldison reportedly advised Mews.

According to Mews, the equity investment announced on December 15 was led by Kinnevik and the Growth Equity business within Goldman Sachs Asset Management with participation from Revaia, Derive Ventures, and Orbit Capital and included returning investors Battery Ventures, Notion Capital, Salesforce Ventures, Thayer Ventures, and henQ. The company also expanded its existing debt facility with Columbia Lake Partners. According to Mews, this latest round brings the total amount raised to date to USD 225 million.

Headquartered in Prague, Mews provides a cloud-based hotel property management platform with tools covering reservations, payments, and others.

“Our mission is to transform the hospitality industry with cloud solutions that make hospitality more rewarding for everyone,” commented Mews CEO Matthijs Welle. “This funding will enable the Mews team to accelerate some very ambitious plans in product & engineering, continue our international expansion, and ensure we can serve the most forward-thinking hotel owners and operators in the world.”

The Orrick team included Partner Shawn Atkinson and Senior Associate Stephen Tallon.

Allen & Overy has advised Fagron B.V. on its public offer addressed to minority shareholders of Fagron Ceska Republika.

Founded in 1990, Fagron is a Rotterdam-headquartered pharmaceutical manufacturing company. The company is active in 32 countries in Europe, the Americas, the Middle East, Africa, Asia, and the Pacific.

The Allen & Overy team was led by Partner Prokop Verner and included Associate Martin Vykopal and Trainee Denisa Jonasova.

DLA Piper has advised Cube Infrastructure Managers on the acquisition of MVV Energie CZ. Eversheds Sutherland reportedly advised the sellers.

Cube Infrastructure Managers is a Luxembourg-based independent management company focusing on European infrastructure investments.

MVV Energie CZ, a Czech subsidiary of German energy company MVV Energie AG, is a producer and distributor of heat in the Czech Republic. In 2021, the Czech company sold 690 gigawatts of heat and 170 gigawatts of electricity and had EUR 78 million in revenue.

DLA Piper’s team included Country Managing Partner Miroslav Dubovsky, Senior Associates Petr Samec, Jan Zidek, Marcel Janicek, and Jan Rataj, and Associates Pavlina Trchalikova, Jan Metelka, and Petr Varvarovsky.

Editor’s Note: After this article was published, Eversheds Sutherland confirmed its involvement to CEE Legal Matters. The firm’s team included Partners Marek Bomba and Bernhard Hager, Counsels Petra Konecna and Ondrej Benes, Senior Associate Jakub Verlik, and Associate Maroš Kandrik.

On January 9, 2023, Allen & Overy announced that it had advised Kommunalkredit Austria AG and Komercni Banka on the syndicated leveraged infrastructure acquisition financing of Cube Infrastructure Fund III’s purchase of MVV Energie CZ. The firm’s team included Bratislava-based Counsel Attila Csongrady and Senior Associate Peter Redo, Prague-based Counsel Petra Mysakova, Senior Associate Pavel Prihoda, and Associate Barbara Midova, and Luxembourg-based Partner Frank Mausen and Counsel Pierre-Henry Maroteaux.

Kocian Solc Balastik has advised J&T IB Capital Markets on the issuance of unsecured unsubordinated book-entry bonds by J&T Arch Convertible Sicav with a total value of up to CZK 1 billion and an option to increase by up to 100%.

“The uncommon structure of the bonds entitles the bondholder to a variable coupon linked to the price of the underlying’s investment share issued by J&T Arch Convertible Sicav, a qualified investor fund, and enables the bondholder – qualified investor – to convert the bonds into shares, thus effectively exchanging the coupon yield for a participation interest in the fund,” KSB informed.

J&T IB Capital Markets provides investment banking and advisory services in the CEE region, in particular, in the Czech and Slovak Republics. The company focuses on the debt capital market, equity capital market, and corporate finance transactions.

In 2022, KSB also advised J&T IB Capital Markets on a bond issuance by J&T Energy Financing CZK (as reported by CEE Legal Matters on August 24, 2022) and on J&T Banka’s issuance of subordinated unsecured income certificates (as reported by CEE Legal Matters on July 21, 2022).

The KSB team included Partners Vlastimil Pihera and Martin Krejci and Lawyers Matus Kovacic and Tomas Travnicek.

Dentons has advised CSOB and Ceska Sporitelna on their EUR 74.13 million loan to Penta Real Estate for the construction of the office buildings within the Nova Waltrovka project in Prague.

According to Dentons, “Nova Waltrovka includes two office buildings, a hotel, and 400 apartments. In October 2022, Penta celebrated the successful completion of the rough construction. The office buildings and adjacent wide boulevard should be completed by autumn 2023.”

“Due to the current political and economic uncertainty, many ongoing real estate development projects are facing strong inflationary pressure. According to a recent statement by Penta, the Nova Waltrovka project budget had to be increased by CZK 1 billion to CZK 5 billion to reflect increased costs,” the firm informed.

Penta Investments company Penta Real Estate operates in the real estate market in the Czech Republic, Slovakia, and Poland.

The Dentons team was led by Partner Daniel Hurych and included Counsels Jan Hrivnak and Jana Malkova Zelechovska and Associates Martin Fiala, Leontyna Bartova, Jan Blazek, Jan Sedlak, and Samuel Bodik.

Dentons did not respond to our inquiry on the matter.

On 28 November 2022, the Council of the European Union gave final approval on the Corporate Sustainability Reporting Directive (CSRD).

This Directive complements the Non-Financial Reporting Directive (NFRD), in particular by requiring certain entities to make mandatory disclosures on sustainability issues such as environmental, social or human rights or governance aspects.

These rules will apply gradually.The first wave of obligated entities, i.e. entities already covered by the NFRD,will be required to publish non-financial reporting in 2025, which will include information collected (already!) for the fiscal year 2024. In 2026, large companies not currently covered by the NFRD will publish non-financial reporting for the fiscal year 2025, and in 2027, publicly listed small and medium-sized enterprises will publish non-financial reporting for the fiscal year 2026.

However, all businesses should be prepared to field requests for sustainability information from their clients. Indeed, all the above-mentioned entities will progressively require sustainability information from their suppliers throughout the supply chain as part of their own obligations, indirectly “forcing” their suppliers to report on non-financial reporting, starting in 2024. It cannot be ruled out that obliged entities will give preference to more sustainable and better prepared companies in tenders for new suppliers.

The CSRD may thus surprise you twice. It will have to collect sustainability information:

– from a considerably wider range of companies, as obliged entities, will be asking their suppliers; and

– as early as 2024.

By Jana Pospisilova, Associate, JSK, PONTES

Kocian Solc Balastik has advised J&T Banka on its acquisition of a majority share in Amista Investicni Spolecnost from Cinekin. Tovarek Horky and Partners reportedly advised Cinekin.

Amista Investicni Spolecnost is a Czech Republic-based manager and administrator of qualified investor funds.

Last year, KSB also advised J&T Banka on its initial partnership with Amista, through the acquisition of a 9.9% stake in the company (as reported by CEE Legal Matters on September 15, 2021).

KSB’s team included Partner Vlastimil Pihera, Lawyers Jana Guricova and Martin Vrab, and Junior Lawyer Karolina Vosatkova.

Editor’s Note: After this article was published, Tovarek Horky and Partners confirmed it had advised Cinekin. The firm’s team was led by Managing Partner Antonin Tovarek and Counsel Milan Michl.

JSK has advised the Sudop Group on its acquisition of an 80% stake in BizzTreat. Briza & Trubac advised BizzTreat founders Radovan Jirka and Jiri Tobolka as well as their spouses on the sale. 

The Sudop Group is a Czech Republic-based project and engineering company. 

BizzTreat is an IT company providing data analytics services. According to JSK, “in the seven years since entering the market in 2015, it has transformed from the original two-person founding team into a well-functioning company with more than 40 data detectives – as BizzTreat analysts call themselves – and will reach a turnover of over CZK 50 million in 2022.”

According to the firm, with the acquisition, “Sudop has strengthened its already stable and leading position in the Czech IT market by acquiring its eleventh IT company. The acquisition supports its plan to build one of the largest IT groups in the Czech Republic and significantly contributes to the consolidation of the Czech and Central European IT markets.”

“The volume of data that companies across sizes and sectors can collect today is skyrocketing,” Sudop CIT Chairman of the Board Jiri Zivnustka said. “Naturally, the demand for technology services to help sort and make sense of this data is growing. The partnership with BizzTreat, an expert in data analytics, was a logical step for us in the expansion of Sudop CIT.”

JSK’s team included Partner Tomas Dolezil and Senior Associate Jana Pospisilova.

The Briza & Trubac team included Partner Patrik Kozeluha, Attorney at Law Jakub Kucera, and Associate Kristian Hajduk.

On November 15, 2022, CMS announced that J&T and Concens Investments’ sale of their Ostrava logistics assets to EQT Exeter (reported by CEE Legal Matters on January 19, 2022) had closed.

“The deal, which was structured as a series of phased acquisitions, demonstrates the attractiveness of the Czech industrial market,” CMS Partner Lukas Hejduk commented.

As previously reported, CMS advised J&T and Concens Investments on their EUR 150 million sale of five Ostrava logistics halls to EQT Exeter. Dentons advised the buyer.

EQT Exeter is a real estate solutions provider that focuses on acquiring, developing, and managing logistics/industrial, office, life science, and residential properties in Europe, the Americas, and Asia.

The CMS updated team included Hejduk, Senior Associate Michal Samek, Associate Jaroslav Lepka, and Lawyer Ondrej Nymbursky.

An amendment to the Czech Significant Market Power Act (the “SMP Act”), which should harmonise Czech law with the EU directive on unfair business practices (the “Directive”), was recently signed by the President and will become effective as of 1 January 2023.

Unfortunately, the Czech legislators have adopted a unique interpretation of the Directive and made additional modifications. Hence, the Czech law governing trade with agricultural products will continue to be singular and will now extend from the retail level to the whole supply chain.

A fundamental issue since the SMP Act came into force in 2010 has been the personal scope of its application. The regulator in this area, the Office for the Protection of Competition (the “Office”), has long interpreted the SMP Act as being applicable to any customer purchasing food for the purpose of resale whose annual turnover for the sale of food and related services exceeded CZK 5bln in the Czech Republic. This has been subject to plenty of professional criticism. When the deadline to transpose the Directive expired in 2021, the Office had to start applying the so-called relative concept, taking into account not only the absolute turnover of the customer but also the bargaining power of the supplier (who could often achieve even higher turnover than the customer).

Indeed, the Directive grants significant market power to customers only if their turnover falls into a higher of six turnover bands than the supplier’s band. This regime was also envisaged in the original draft amendment to the SMP Act. Unfortunately, a modification suggested by Members of Parliament and without much expert discussion – the so-called absolute principle granting significant market power to all customers whose turnover in the Czech Republic exceeds CZK 5bln per year (as was applied before 2021) – was also reincorporated into the amendment. Moreover, the amendment also removed the link between turnover and food sales. Effectively there is now a risk that a business which is only marginally active in the field of agricultural products (not only at the retail level but also at all other levels from production to distribution), but whose total turnover exceeds CZK 5bln, will be always regarded as a customer with significant market power. It will likely be a question of practical application whether the Office will actually adopt this almost absurd approach, but in any event the amendment has not done any good in this respect.

In addition, the scope of the SMP Act now extends from retail to all levels of the agricultural supply chain. Instead of just eight supermarket chains, the SMP Act is now likely to apply to dozens or even hundreds of businesses. All of these companies will now have to ensure that their contracts with suppliers comply with the requirements of the SMP Act. Notwithstanding that discussion about the prospective benefits of the SMP Act has yet to be resolved, the amendment inevitably is coming into effect. Therefore, the companies concerned will be compelled to reflect this major change in their practice, bringing further regulation to their B2B relations.

Finally, the amendment to the SMP Act also changes the enumeration of abusive practices, i.e. instances of misuse of significant market power (in post-amendment terminology, unfair business practices). The vast majority of the practices prohibited by the current SMP Act have been carried over into the amended law, and several additional practices based on the Directive have been added. These changes will also impose costs on retail chains and their suppliers in the form of contract modifications. For companies at other levels of the supply chain, contract modifications with suppliers will in most cases be unavoidable if they do not want to risk severe penalties under the SMP Act.

For now, it seems that the Office, but especially many companies in the agricultural sector, will have to cope with the amendment to the SMP Act in its current form. As some of the rules are rather formalistic, these companies will effectively have no choice but to revise their contractual relations with their customers. Moreover, the SMP Act may now affect even those companies that would not have realistically expected it.

By Jan Kupcík, Attorney at law,  Schoenherr