Category: Czech Republic

Allen & Overy has advised W.A.G. payment solutions plc (Eurowag) on its IPO on the London Stock Exchange.

Citigroup Global Markets Limited and Morgan Stanley & Co. International plc acted as joint sponsors, joint global coordinators, and joint bookrunners, with Jefferies International Limited acting as joint global coordinator and joint bookrunner, Numis Securities Limited and UBS AG as joint bookrunners, and Rothschild & Co acting as financial adviser.

According to A&O, “Eurowag announced its intention to undertake an IPO on September 13, 2021, and if it proceeds, will apply for admission of its ordinary shares to the premium listing segment of the Official List of the FCA and to trading on the main market of the London Stock Exchange. The offer is expected to comprise both new ordinary shares to be issued by the company, raising gross proceeds of approximately EUR 200 million to support Eurowag’s growth strategy, and existing ordinary shares to be sold by existing Eurowag shareholders.”

Founded in the Czech Republic in 1995, Eurowag is, according to the firm, a pan-European integrated payments and mobility platform focused on the rapidly-growing commercial road transportation industry.

Allen & Overy’s team included Prague-based Partner Prokop Verner, Senior Associates Jana Chwaszcz and Marketa Cisarova, and Junior Lawyer Denisa Jonasova, and London-based Partners James Roe, Jeff Hendrickson, Sarah Henchoz, Paul McCarthy, and Lydia Challen, Senior Associates Hannah Brown, Jonathan Benson, and David Merlin-Jones, Associates Laura Green, Sophie Davis, Colleen McCartney, and Abigail Thompson, and US Law Clerks Yolanda Borquaye and Emenike Omeye.

Former 3M General Counsel Edit Rosta has joined SAP in Prague as a Senior Legal Counsel.

Prior to SAP, Rosta served as 3M’s General Counsel for Slovakia, Hungary, and the Czech Republic between 206 and 2020. Before that, she was the Country Counsel for Hungary with Hewlett-Packard between 1996 and 2012, preceded by two years as a Junior Lawyer with OTP Bank in Budapest.

In 2017, Rosta was interviewed by Wolf Theiss’s Jan Myska and Petr Syrovatko in our Face-to-Face interview series.

Originally reported by CEE In-House Matters.

Allen & Overy has advised Czech Gas Networks Investments S.a r.l on its first-ever green issuance and placement of EUR 500 million green notes with investors on international capital markets. Clifford Chance advised the joint bookrunners Citigroup Global Markets Limited, ING Bank N.V., Societe Generale, and UniCredit Bank AG.

According to Allen & Overy, “the green notes, rated BBB+ by both S&P and Fitch, have been listed on the Global Exchange Market of the Irish Stock Exchange plc trading as Euronext Dublin. The proceeds from the issuance will be used exclusively for financing or refinancing of new or existing eligible projects under the CGNI’s Green Finance Framework.”

According to the firm, CGNI, which is owned by a consortium of long-term infrastructure investors, holds 100% of the share capital of Czech Grid Holding, a.s., which in turn fully controls two core Czech businesses, operated by its subsidiaries: GasNet, s.r.o. and GasNet Sluzby, s.r.o. 

Earlier this year, Allen & Overy advised CGNI on a EUR-Denominated Note Issuance and Placement (as reported by CEE Legal Matters on April 14, 2021).

Allen & Overy’s team in Prague included Partner Petr Vybiral, Senior Associate Jana Chwaszcz, and Junior Lawyer Denisa Jonasova, with a further team in Luxembourg including Partner Paul Peporte and Associate Ruslana Hrischeva.

Kocian Solc Balastik has advised J&T Banka on entering into a strategic partnership with Amista.

According to KSB, J&T Banka took over a 9.9% stake in Amista – the largest Czech manager and administrator of qualified investor funds. “The partnership is aimed at providing demanding clients with tailor-made services and expanding their portfolios.”

KSB’s team included Partner Vlastimil Pihera and Lawyer Jana Guricova.

KSB did not reply to our inquiry on the deal.

Dentons has advised Stratus Data Systems company Gobii Europe on the establishment of a joint venture with the CSOB Group to bring the Igluu technology solution to the Czech real estate market. Glatzova & Co reportedly advised the CSOB Group.

The Igluu technology solution will provide digital tools, including a public online portal with a real estate listing, cadastral data, and real estate valuation, also integrating CSOB’s innovative technologies. While already being used by more than 115,000 real estate professionals in the US and Canada, the first version of the solution is expected to launch in the Czech market in late 2021 or early 2022.

According to Dentons, “the technology will significantly simplify and speed up [the work of real estate professionals and financial intermediaries], accelerate the arrangement of mortgage loans and other housing-related services, and support the development of new business opportunities. … This service will benefit all those interested in buying or renting housing as well as other participants in the real estate market.”

Dentons’ team included Prague-based Partner Petr Zakoucky, Counsel Petr Kotab, Senior Associates Ivo Hartmann and Adam Prerovsky, and Associates Lucie Kubinyiova, Petr Muller, and Justina Bodlakova as well as New York-based Partner Timothy Santoli and Counsel Adrian Stewart.

Editor’s Note: After this article was published, Glatzova & Co confirmed it had advised the CSOB Group on the deal. The firm’s team was led by Partner Jan Vesely.

Privacy pros are now celebrating the three-year anniversary of the GDPR, even as we are living through the current pandemic. It is, in fact, almost impossible to talk about privacy trends without touching on the COVID-19 crisis.

Seemingly overnight, the world turned digital. What first appeared as novel technology used by geeks became the norm in 2020, bringing forth a plethora of issues for companies to tackle. Although those issues are not new, their volume and severity in the current circumstances are breathtaking. Let us look at some of the most important ones, eventually merging them into a single interconnected topic.

What does it mean to be online? The world as we knew it before the crisis relied heavily on personal contacts – customers could verify that a service provider was real and the provider communicated with known customers (presenting his/her ID, and a real face). Although many businesses used electronic communications to further customer relationships in the past, today many of them do not even see their customers in person at all. This creates extreme pressure on the trustworthiness of modern communication, identification, and authentication tools.

The use of digital IDs in the Czech Republic by citizens has been limited. What could be a game-changing experience is the introduction of the “BankID” – an initiative of Czech banks that provides identification and allows other governmental authorities or certification entities to authenticate and conclude agreements within the eIDAS regulatory framework. (We are glad to say that our law firm advised the banks on the implementation of the BankID system, as well as contributing to the drafting of legislation underpinning it). And who else is in a better position to guarantee the security of the whole process than banks, which are the traditional guardians of secrecy and discretion, with strong internal compliance mechanisms?

On the other hand, banks are just a part of the wider economy, and the use of digital tools has expanded across all sectors during the pandemic. And here comes the twist – every technology has its weaknesses, and as Murphy’s law puts it, “Anything that can go wrong will go wrong.” Cybersecurity experts will add that it is not a question of “if,” things will go wrong, but “when.” Not one week passes without the world media reporting news about cyber-attacks, whether it’s hackers causing malfunctions in vital infrastructure systems or just ordinary businesses unable to operate for a few days. It’s like a continuous earthquake and rising flood moving around, never stopping. And statistics from the Czech Data Protection Office (DPA), which receives personal data breach notifications, show that this trend is not staying away from the Czech Republic. What is, however, more alarming (and possibly also promising), are the causes of these data breaches. Most of them happened because of human error, technical misconfigurations, and a failure to audit security measures regularly. In other words, those data breaches were probably not inevitable and could have been avoided if an internal level of compliance had been sufficiently maintained.

Another risk of going digital without properly assessing the legal constraints involves direct marketing, which can of course be a very effective method of reaching out to customers – almost the only one if you cannot meet people in brick-and-mortar shops. In 2020, in a groundbreaking case, the DPA imposed the previously inconceivable penalty of CZK 6 million on a company for sending unsolicited commercial communication. The DPA’s message was clear – disobeying the rules will not pay off, and penalties will be set to diminish any profits the sender may have obtained. And the takeaway for any business is that any department, whether responsible for marketing or customer care, must be aware of the risks that even well-intentioned actions can have.

This brings us back to the inter-connecting theme: a workable compliance system with regular audits, preventive checks, systematic training, and independent oversight. Only this will contribute to promoting the security and trust of the online world we have all suddenly learned to live in. Anything else is just sitting and waiting for the next disaster to strike.

By Robert Nespurek, Partner, and Richard Otevrel, Counsel, Havel & Partners

This Article was originally published in Issue 8.6 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Kinstellar has successfully defended Kiwi.com before the Czech Constitutional Court against a preliminary injunction issued by the Regional Court in Brno.

According to Kinstellar, the preliminary injunction, issued based on Ryanair’s claim by the Regional Court in Brno in January and subsequently upheld by the High Court in Olomouc, was struck down by the Constitutional Court. According to the firm, the Constitutional Court deemed that the preliminary injunction interfered with Kiwi’s freedom of expression, right to conduct business, and right to judicial protection.

Kinstellar’s team consisted of Counsel Zdenek Kucera, Junior Associate Stepanka Havlikova, and Paralegal Jiri Marsal.

The Czech Ministry of Justice recently published a bill on preventive restructurings (the “Bill“) implementing the directive on preventive restructuring frameworks which will introduce a brand-new legal tool preventing the insolvency of viable enterprises in temporary financial difficulties.

The Bill is now heading to the legislative process and should become effective from July 2022. Although it may still undergo some changes, it is already obvious that it will revolutionise Czech insolvency law.

This article aims to introduce the main features of this new tool and to explain which entities preventive restructuring is available to and which situations it will tackle.

Objective

Today a distressed company may try to achieve an out-of-court arrangement with its creditors, this being a contract-based solution requiring the consent of all affected creditors with the terms of the restructuring. If a timely agreement with all affected parties cannot be achieved, the distressed company risks the deterioration of its financial situation or even insolvency, which can only be resolved in the context of formal insolvency proceedings.

The aim of the Bill is to enable debtors to restructure effectively at an early stage and to avoid insolvency, preventing the unnecessary liquidation of viable enterprises and restoring them to health since, compared to the current state, it will be possible to accomplish preventive restructuring with the involvement of key creditors only.

Scope

Access to preventive restructuring is limited to legal entities that meet the following conditions:

• the entity should be in good faith that its restructuring plan, as a key document of the whole process, will prevent the likelihood of insolvency;
• the entity is not insolvent in the form of illiquidity – preventive restructuring is not intended to be an alternative to insolvency proceedings and should not apply in case of serious insolvency situations where the entity has delayed the solution of its financial issues, but is primarily aimed at enabling the entity to continue to do business by changing the structure of its assets and liabilities and by implementing operational changes; and
• the financial difficulties are significant enough that declining the adoption of restructuring measures would by mere passing of time result in the entity’s insolvency; this condition should exclude the preventive restructuring of financially healthy entities manipulating their creditors or business partners to provide advantages or relief beyond the ordinary course of business.

Exclusion of preventive restructuring

Apart from the positive conditions to be met to be able to access preventive restructuring, the Bill also aims to introduce conditions that will exclude the commencement or continuation of preventive restructuring.

Generally, preventive restructuring is excluded in cases where the business entity has a dishonest intention (nepoctivý záměr) (the Bill clarifies this vague term by providing a demonstrative list of these situations, such as manipulation of voting groups, unfair preference of certain creditors, etc.) or the exclusion is due to the debtor’s ongoing liquidation or the existence of previous insolvency proceedings.

Main new features

Since the Bill will introduce a wide range of new measures of preventive restructuring, I will mention only some of the most distinctive aspects illustrating the preventive restructuring framework to be introduced in the Czech Republic, especially in the context of existing insolvency laws:

Restructuring with key creditors only

Compared to insolvency proceedings, preventive restructuring does not have to involve all the existing creditors of the business entity. The circle of creditors (affected parties) is chosen by the entity itself. Claims of the unaffected parties will be set aside as unaffected and will be satisfied within the due dates.

Cross-class cram-down

Although preventive restructuring is based on the broadest possible consensus between the business entity and its creditors when it comes to intended restructuring measures indicated in the restructuring plan, it is possible, subject to certain conditions, to “impose” the agreement on dissenting creditor(s).

Limited court involvement

During preventive restructuring the court will be involved only partially and subject to specific conditions in case of some sort of “partial proceedings”, compared to insolvency proceedings where the entity is constantly a party to the court proceedings.

Conclusion

In the aftermath of the COVID-19 pandemic, which has caused some businesses to fall into hard times, the preventive restructuring process to be introduced by the Bill is more needed than ever in the Czech Republic.

Although preventive restructuring clearly will not be for everyone, more sophisticated market participants will take the new legal framework of preventive restructuring into account even before the effectiveness of the Bill is seen.

By Natalie Rosova, Attorney at Law, Schoenherr

Kocian Solc Balastik team has advised the third fund of the Arete Group on its approximately EUR 10 million acquisition of a production facility complex near Beroun, Czech Republic.

According to KSB, “the complex is used for the production and storage for the Czech company Hronovsky s.r.o.”

KSB recently also advised KSB on securing a EUR 30 million loan from Raiffeisenbank (as reported by CEE Legal Matters on July 28, 2021).

KSB’s team included Partner Jiri Hornik and Advocate Dana Jackova.

The firm did not reply to our inquiry about the deal.

VGD Legal has advised the Jablotron Group on its approximately EUR 9.8 million acquisition of the Avicena project from Vavrincuv Vrch. Solo practitioner Michal Zibrid reportedly advised the seller.

According to VGD Legal, the Avicena project consists of medical clinic space, office space, and retail and leisure space in Liberec, the Czech Republic.

The Jablotron Group is a Czech manufacturer of alarm systems, home automation, heating control, electronics, and building and vehicle security products.

VGD Legal’s team consisted of Partner Martin Havelka and Legal Trainee Lukas Cerny.