Category: Estonia

Cobalt Estonia has advised French real estate fund Corum Origin on its acquisition of an industrial building that is fully leased to Harmet OU for 15 years under a sale and leaseback transaction.

According to Cobalt, the property built in 2017 as a turnkey project for Harmet’s factory is located approximately 30 kilometers from Tallinn’s city center. The building’s total surface is around 28,000 square meters, which, the firm reports, “makes it the largest production unit built in 2017 in Estonia.”

Corum is an independent asset management company that is registered in France and invests in real estate in Europe.

According to Cobalt, Harmet specializes in manufacturing modular homes, modular on-site facilities, and various metal structures, “offering its clients complete solutions from design engineering to final assembly of the buildings.”

Cobalt also advised Corum recently on the acquisition and leaseback transaction of the ELKO Group headquarters office and warehouse in Riga (as reported on by CEE Legal Matters on January 18, 2019). In 2017, the firm also advised the fund on its acquisition of the Prisma shopping center in Narva, Estonia (reported on by CEE Legal Matters on July 13, 2017).

The Cobalt team included Partner Aivar Taro and Assistant Lawyers Helen Sool and Mari Teder.

Cobalt reported that it was not able to disclose further information on the deal. 

Cobalt has advised Finnish private equity fund KJK on its acquisition of a 50% stake in Estonian Tahe Outdoors OÜ. Subsequently, Ellex Raidla advised Tahe Outdoors on its use of those funds to acquire BIC Sport for somewhere between EUR six and nine million, creating the second largest water-sports equipment producer in Europe.

According to Cobalt, the KJK Fund III mainly invests “in direct equity investments into both small or medium-size companies in Eastern Europe.”

According to Ellex Raidla, the acquisition of BIC Sport “will lead to the creation of a new and dynamic worldwide player, with unique industrial technologies across a wide range of products and an international network of specialist retailers. BIC Sport’s products will continue to be manufactured and sold under license, together with the SIC & OXBOW Brands.”

“Founded in 1979,” Ellex reports, “BIC Sport pioneered the windsurf industry and progressively diversified its activities to include surfing, kayaking, junior racing dinghies and stand-up paddleboarding. Headquartered in Vannes, France, BIC Sport sells its products in more than 90 countries.”

And, Ellex reports, “Tahe Outdoors is one of the most successful and dynamic European manufacturers of paddle sports and kitesurf products, with strong brands such as Tahe Marine, Core, Zegul, [and] Egalis. Founded in 1989, based in Estonia, Tahe Outdoors is distributed in more than 50 countries with products manufactured in France, Germany, and Estonia.”

The Cobalt team advising KJK was advised by Senior Associate Kristjan Kotkas and Associate Madis Reppo.

The Ellex Raidla team was advised by Partner Risto Vahimets, Senior Associate Karl-Erich Trisberg, and Associate Anna Trine Raudsepp.

Ellex Raidla has advised Estonian pension fund manager LHV Varahaldus and LHV Bank on their equal subscription to and acquisition of EUR 10 million in secured notes issued by Transpordi Varahaldus, Estonia’s state-owned holding company, to finance its purchase and leasing to Estonian airline Nordica of a Bombardier CRJ900 jet. Transpordi Varahaldus [TVH] was advised by Triniti, Derling Primus acted as the security agent appointed by the finance parties, and Nordica was advised by the Tark law firm.

According to Triniti, “TVH issued bonds in the amount of 10 million euros in December 2018 with an 8-year maturity …. TVH used the additional finances for the acquisition of one vintage CRJ900NG, thereby increasing the fleet of the company to seven aircraft of the same type.”

Ellex Raidla reports that the new aircraft has already been employed in serving flights for the Scandinavian carrier SAS.

TVH is a state-owned company founded to operate as an investment firm, financing and managing fixed assets in the field of transport. It previously issued bonds in 2017, when securities totaling EUR 25 million in value were issued for the purchase of two CRJ900 aircraft. 

According to Ellex Raidla, the financing was unique in Estonia, “due to the fact that these are the first major aircraft finance transactions which have been subject to Estonian laws (both in respect of finance and security documents). Previous aircraft finance transactions in Estonia have been subject to foreign laws.”

The Ellex Raidla team was led by Partner Ermo Kosk and Counsel Toomas Kasesalu.

The Triniti team advising Transpordi Varahaldus consisted of Partners Ergo Blumfeldt and Tonis Tamme, Senior Associates Ain Kalme and Sten Veidebaum, and Associate Sandor Elias.

The Derling Primus team was led by Managing Partner Hannes Vallikivi and included Partner Andres Siigur

Pohla & Hallmagi has advised Kunda Sadam AS on the acquistion of PK Terminal OU. The sellers were reportedly advised by Laus & Partners.

Kunda Sadam AS is a company owned by the Baltic Maritime Logistics Group.

PK Terminal began providing warehousing and transporting services within and outside the port of Kunda in 2013. The primary goods going through the warehouse are grain products, wood pellets, pulp, and other products that require protection from the weather. 

The Pohla & Hallmagi team was led by Partner Toivo Viilup.

Pohla & Hallmagi informed CEE Legal Matters that it could not provide any more information on the deal.

Pohla & Hallmagi has advised Kunda Sadam AS on the acquistion of Palgaria Kraana OU. The sellers were reportedly advised by Laus & Partners.

Kunda Sadam AS is a company owned by the Baltic Maritime Logistics Group.

The Pohla & Hallmagi team was led by Partner Toivo Viilup.

Pohla & Hallmagi informed CEE Legal Matters that it could not provide any more information on the deal.

Sorainen has advised Canadian Forest Products on its acquisition of Vida Packaging Eesti. The transaction is connected to Canfor’s 70 percent acquisition of Swedish company VIDA Aktiebolag.

“With the acquisition of VIDA, we are excited to become a truly international manufacturer and provider of wood product solutions for our global customers,” said Don Kayne, President and Chief Executive Officer of Canadian Forest Products. “This transformational growth will allow Canfor to further diversify and secure a worldwide fibre supply to meet the growing demand of our customers for high-quality wood products.”

Canfor is a leading integrated forest products company based in Vancouver, British Columbia. Its annual production capacity will be approximately 7.2 billion board feet, with a highly diversified operating base in western Canada, the U.S.A. and Europe.

Sorainen’s team consisted of Partner Toomas Prangli, Senior Associate Juulika Aavik, and Associate Nele Suurmets.  

Sorainen did not reply to our inquiry about counsel for the sellers.

Ellex Raidla has advised Inbank on the issuance of AT1 bonds through private placement in the amount of EUR 3.15 million.

“AT1 or Additional Tier 1 is an innovative hybrid instrument in Estonian banking,” Ellex reports, “having characteristics of both subordinated debt and equity, but belonging to Tier 1 capital in terms of capital adequacy calculation. For the investor, risk level and the yield of AT1 bond is higher than in an ordinary subordinated bond.”

Priit Poldoja, the Chairman of the Inbank Supervisory Board, explained that the AT1 bond “is a complex instrument, issued in Estonia for the first time. With the issue, we wanted to test investors’ interest for bonds with perpetual term and higher risk. We are happy that investors’ interest in our bond was higher than expected and we raised more capital than we initially anticipated.”

Launched as a bank in 2015, Inbank provides services through its Internet bank and partner network. Inbank operates in the Estonian, Latvian, Lithuanian, and Polish markets. In addition, Inbank raises international deposits from the German and Austrian markets.

The Ellex team consisted of Partner Raino Paron and Senior Associate Helen Ratso.

Pohla & Hallmagi has advised Autospirit on its acquisition of shares in Ascar Auto AS, the Tallinn Opel & Peugeot dealership, from Amserv Grupp. Ellex Raidla advised the seller on the deal.

Closing is contingent on the approval of the Estonian Competition Authority.  

The Pohla & Hallmagi team was led by Attorney at Law Toivo Viilup. 

The Ellex team consisted of Partner Risto Vahimets, Senior Associate Karl-Erich Trisberg and Alla Kuznetsova, and Associate Anna Trine Raudsepp.

Ellex Raidla has advised AS LHV Pank on the acquisition of the loan portfolio of Versobank AS, which is under liquidation, for approximately EUR 18.4 million. The transaction is expected to close in late January, 2019.

According to Ellex, the loan portfolio is acquired as a company, consisting of loan and collateral agreements and two employees related to the portfolio. The loan portfolio contains loans to Estonian companies in the amount of approximately EUR 17 million as well as loans to Estonian resident private customers in the amount of approximately EUR 3 million.

“We are actively seeking possibilities to grow our business,” said Erki Kilu, Chairman of the Management Board of LHV Pank. “Increasing the loan portfolio is of critical importance for us in order to increase interest income and raise efficiency, given the existing cost base. Although, the loan portfolio of Versobank is not big, it is a well-secured portfolio with an interest rate that meets our expectations. Furthermore, acquisition of the loan portfolio gives us real experience of how the loan and collateral information systems work also in case of acquired agreements.”

The Ellex Raidla team was led by Partner Gerli Kilusk.

Editor’s Note: After this article was published CEE Legal Matters learned that KPMG had advised Versobank on the deal. The firm’s team consisted of Partner Karin Kaup and Associate Kadri Kasepalu.

Ellex Raidla is advising Lumi Capital and LHV pension funds on the acquisition of buildings in the outskirts of Tallinn’s Mustamae district from Bonava.

According to Ellex, the buildings, which will be completed in the second half of 2021, will feature 84 one, two, and three-room apartments for rent. The buildings will, the firm reports, “form a part of the comprehensive living environment developed by Bonava, in which 750 new homes will be completed over the next five to seven years.”

“Lumi Capital will continue looking for investments all over Tallinn, to create brand new rental apartments, for which there is a great demand. In cooperation with LHV pension funds we plan to increase the portfolio of rental houses to 500 apartments,” commented Martin Rekor, partner at Lumi Capital. 

Ellex Raidla’s Partner Ermo Kosk, Senior Associate Sandra Vark, and Associate Marilin Laud are advising Lumi Capital and LHV pension funds on the establishment of the transaction’s legal structure, conducting the legal due diligence, and drafting and negotiating transaction documents.