Category: Estonia

Cobalt Estonia advised ride-hailing platform Didi Chuxing on its investment in Estonian-based transport app Taxify.

Taxify has over 2.5 million customers in 18 countries. It has attracted EUR two million of venture capital investments.

According to DiDi Founder and CEO Cheng Wei, the investment, which is part of a broader strategic partnership, will help link up transport services in Asia with those in Europe and Africa. DiDi, which serves 400 million users across a variety of services in China, said it will help Taxify to grow its presence and to develop AI-powered transportation products in its regions.

Cobalt reports that it “advised Didi Chuxing in all legal aspects of the transaction, including legal due diligence, drafting the transaction documents, represented investor during negotiations and advised on other transaction related matters.” The firm’s team was led by Specialist Counsel Ott Aava, Partner Martin Simovart, and Senior Associate Karl Kull.

Editor’s Note: After this article was published, CEE Legal Matters learned that a Njord team consisting of Partner Anne Veerpalu and Associate Siiri Traat-McClelland had advised Peaksjah OU — one of the first business angels of Taxify — on the deal, and that a Hedman Partners team consisting of Partners Valter Vohma and Dmitri Tsimpoaka, Associate Toomas Seppel, and Junior Associate Henrik Trasberg had advised Taxify.

Cobalt is reporting that it and Baker McKenzie have been chosen as legal advisor to the Port of Tallinn’s on its initial public offering. 

According to Cobalt, its joint bid with Baker McKenzie was selected from eight such offers. The firm reports that “our role will be to advise the Port of Tallinn in all aspects related to the IPO, including preparation of corresponding documentation plus a prospectus.  The Estonian government has decided to float up to 30% of the shares in the state-owned Port of Tallinn and list the shares on Nasdaq Tallinn by the end of the first half of 2018 at the latest. The Port of Tallinn is the biggest port authority in Estonia and in terms of both cargo and passenger traffic the biggest port on the shores of the Baltic Sea.

Leadell Pilv has represented Urmas Nisuma, one of the owners of the Hotel Parnu, in a dispute with business partner Ado Sepa and OU Linden Hotell, which Sepa controls involving allegations that Sepa and his company had taken over effective control of Hotel Parnu from Nisuma and lefyt him out of both the profits and day-to-day business of the hotel.

According to Leadell Pilv, after almost four years of proceedings, the Court ruled “that OU Linden Hotell, which operates the hotel, must relinquish its possession on the hotel, all the keys and cards, and must turn over the profit earned in the past four years.”

The firm describes the judgment as “an important precedent that is likely to influence future legal practice in Estonia.” According to Leadell Pilv, “if until now a board member could without any substantial risk take everything from a company that was entrusted to him and it was sufficient to avoid responsibility that the transactions were not done directly with himself but his company, then this is no longer the case. The National Court stated that a transaction done between a company and another company owned by the board member is legally the same as if the transaction were done with the board member himself. The National Court said that such a transaction requires consent from the owners and without the owners’ consent only common everyday deals can be made. The same was upheld by the circuit court that decided that the rental agreement that allowed A. Sepa to take control of the hotel is void and must be overturned. Hopefully this case will have a positive effect on Estonian commercial law and legal practice as a whole.”

Urmas Nisuma was represented by Leadell Pilv Attorney-at-Law Tambet Laasik.

Eerik Heldna, who until July 2017 was the Deputy Director General of Estonia’s Internal Security Service, is joining the Nove law firm as Legal Counsel and Head of Corporate and Regulatory Investigations and Anti-Corruption.

In his new role, according to Nove, Heldna will advise the firm’s clients on “corporate internal investigations, maintenance of confidential information, and risk management whilst focusing on risk mitigation in destination countries for companies entering foreign markets and on advising foreign companies entering the Estonian market.”

Nove describes Heldna as having “valuable long-term experience in preventing corruption endangering national security and ensuring the economic security of Estonia. According to Heldna, “that, however, can only happen in cooperation with private enterprises. Experience like that is first and foremost important in sensitive economic sectors such as the defence industry, transit, extensive financial operations, and energetics where the state and private enterprises must be reliable partners. After all, we are all working towards a wealthier and safer Estonia.”

In addition, according to Nove, Heldna “plans to put his existing investigative experience to use in supporting clients prevent, discover, and prove cases of abusive conduct by company employees and executives along with offering advisory services on gathering evidence necessary for a successful litigation.”

Heldna has 20 years of experience as a criminal police and security officer, and he has worked as a senior manager at the Narcotic Crimes Department of the Criminal Police in Tallinn, the Criminal Department of the Northern Police Prefecture, and the Central Criminal Police. For the past eight years Heldna worked for the Estonian Internal Security Service heading the proceedings of corruption offenses. According to Nove, “under his leadership many of the ISS procedural priorities were restructured and an approach of preventing security threats at the earliest possible stages was adopted. Heldna has also headed many significant criminal intelligence operations that led to convictions and has played an important role in the field of international cooperation.”

Arnold Sinisalu, the Director General of the Estonian Internal Security Service, recognized Heldna for his work. “Eerik has been a capable and proactive leader whose contribution to the development of the organization can hardly be overestimated,” said Sinisalu. In addition, the President of the Estonian Republic has awarded Eerik Heldna the Iron Cross of the Cross of the Eagle.

Heldna as graduated from the Police College of the Estonian Academy of Security Sciences (where he specialized in pre-trial investigation) and obtained a Master’s degree in Public Administration at Tallinn University of Technology and a Master’s degree in law at Tartu University. 

According to Urmas Volens, Nove co-founder, the addition of Heldna allows the firm to take “increasingly stronger steps in implementing its strategy based on distinct specialization, the combination of practical, academic and legislative experience, and focus.” According to Volens, “our first year of activity has shown that legal counseling based on such principles is highly valued by clients. We plan to remain true to those general principles in the future as well. Of course, this entails extremely high standards set both for ourselves as well as anyone who joins our office, standards that Eerik completely meets. In addition to that, his immaculate record up to now proves he follows the same underlying values as Nove, resulting in a team stronger than ever.”

Eversheds Sutherland Ots & Co has advised Estonian seafood producer PRFoods on its EUR 14.5 million acquisition of 85% of the John Ross Jr Ltd. and Coln Valley Smokery Limited fish processing companies from the Leigh family.

Both companies are located in the United Kingdom. The sellers, who have been running the companies as a family business, retain 15% of the shareholding.

According to Eversheds, “JRJ is a leading seller of processed salmon with their head office in Scotland, which exports products to thirty countries. JRJ is leading global Scottish processed salmon company with sales in 30 countries and Royal Warrant Holder of the British Royal Family. Coln Valley Smokery is a most renowned artisan smoked salmon producer in the UK.”

The Eversheds Sutherland Ots & Co team was led by Managing Partner Maivi Ots and included Senior Associate Lauri Liivat and Counsel Kerttu-Kaarina Tombak.

The firm did not identify counsel for the sellers.

Sorainen Estonia has advised Armin Karu, Kaia Karu, Erik Karu, and Ines Karu-Salo on the sale of OU Emahool and its franchise of Mothercare online-store and retail stores in Estonia and Latvia to the owner of Juku children stores, Kotryna OU.

According to Sorainen, “Mothercare is well-recognized brand on the retail market specialized in products for mothers, babies, and children up to the age of ten.”

The Sorainen team included Partner Toomas Prangli and Associate Kai Vainola. 

Cobalt has advised venture capital funds Creathor Venture and MedTech Innovation Partners on financing the Finnish startup Blueprint Genetics.

Cobalt describes Blueprint Genetics as “an internationally successful provider of clinical genetic testing for the diagnosis of inherited diseases.”

The start-up will receive a total of up to EUR 14 million from the financing round, which was led by new investors, with existing investors Inventure and Pontos Group participating as well.

The Cobalt team included Partner Kristel Raidla-Talur and Associates Greete-Kristiine Kuru, Jesse Kivisaari, Aleksander Tsuiman, and Liina Saaremets.

Cobalt has advised The Middleby Corporation on its acquisition of Sveba Dahlen Group, a manufacturer of high-quality bakery ovens, baking equipment, and planetary mixers in Northern Europe.

Sveba Dahlen reports approximately USD 60 million in annual sales. 

According to Cobalt, “our assignment [consisted of] advising the client on Estonian law matters during the entire acquisition process.” The firm’s team was led by Senior Associate Heleri Tammiste and Partners Pirkko-Liis Harkmaa and Martin Simovart. 

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

Sorainen has advised Estonian wood manufacturing company Ha Serv and its majority owner Livonia Partners’ EuVECA in the acquisition of Suomen Lampopuu, a Finnish manufacturer of thermo-treated wood products.

Suomen Lampopuu — one of the world’s first manufacturers of ecological thermo-treated wood products — generated over EUR 6 million in sales annually. Its manufacturing facility has over 30 employees and is based in Teuva, Finland. The company exports 90% of its production to more than 20 countries worldwide.

“With this add-on investment, Ha Serv is entering a new phase of expansion,” Livonia founding partner Kaido Veske said. Marko Kevvai, Ha Serv’s CEO added that the acquisition boosts the company’s geographic reach, customer base and product portfolio in the thermowood industry.

Livonia Partners is a private equity investment firm investing in growing and well-managed medium-sized companies in the Baltics and currently managing EUR 83 million. Sorainen previously advised Livonia Partners on its acquisition of Ha Serv — a leading manufacturer of wooden sauna components, custom ready-made saunas, and thermo-treated wood materials — in February 2016 (as reported by CEE Legal Matters on February 22, 2016). Ha Serv serves customers in more than 25 countries and reports annual sales of over EUR 20 million.

The Sorainen team was led by Partner Pekka Puolakka and Senior Associate Juulika Aavik.

Cobalt has successfully represented the company Empower, the energy and telecommunications infrastructure construction company, in court.

According to Cobalt, the firm represented Empower “in relation to a former employee’s claim for compensation for an occupational disease. After assessing the evidence, the courts unanimously found that the work process of Empower has complied with legal requirements and [that] occupational health requirements had not been breached, [so] the employer could not be held liable for the emergence of the occupational disease. The courts rejected the employee’s action in full and also ordered the employee to pay some of Empower’s legal expenses. The Supreme Court refused to accept the employee’s appeal in cassation for processing.”

Cobalt Senior Associate Merle Veeroos represented Empower in the matter.