CEE Legal Matters

Category: Greece

  • W&C and WFW Advise on USD 180 Million Loan to Energean to Facilitate Greek Offshore Development

    W&C and WFW Advise on USD 180 Million Loan to Energean to Facilitate Greek Offshore Development

    White & Case has advised Energean on a USD 180 million reserve-based lending facility in relation to its Greek assets provided by the EBRD, the Black Sea Trade Development Bank, Romanian Ex-Im Bank, Banca Comerciala Intesa Sanpaolo Romania, and HSBC (acting as agent and security agent). Watson Farley & Williams advised the lenders on financing designed for the development of the Prinos Basin offshore of Greece. The new facility is an amendment, restatement, and extension to an existing USD 75 million facility granted to Energean by the EBRD in 2016.

    Energean now has the following two facilities from the consortium: a senior secured reducing revolving credit facility of up to USD 105 million with the EBRD and BSTDB as lenders; and a senior secured revolving credit facility of up to USD 75 million arranged by EximBank Romania with EximBank Romania and Intesa Sanpaolo Bank as lenders. The two facilities sit within an reserve-based lending structure. These facilities support Energean’s development program for the Prinos, Prinos North, and Epsilon operating oil fields, located in Sea of Thrace off the coast of northern Greece between the port of Kavala and the island of Thasos. The financing will principally fund the ongoing development of the Epsilon oil field, as part of the ongoing Prinos development program that includes drilling up to 25 additional wells and building of two additional well platforms by 2021 to materially increase production.

    Watson Farley & Williams’ London Oil & Gas team advising the syndicate was led by Partner Joe Levin, assisted by Associate Shaakir Daud. Tax advice was provided by Partner Tom Jarvis and Associate Edward Moore, while Finance Partner Gary Walsh and Associate Richard Smith separately advised HSBC in its capacity as agent and security agent.

     

  • The Buzz in Greece: Interview with Evi Tsilou of Papapolitis & Papapolitis

    The Buzz in Greece: Interview with Evi Tsilou of Papapolitis & Papapolitis

    “Business is really booming,” says Evi Tsilou, Partner at Papapolitis & Papapolitis in Athens. “I think we are finally starting to see some developments — the time has come for investment and movement in business.”

    This year the third economic adjustment program for Greece, designed to return the country to sustainable economic growth, will come to an end. “The crisis was tough for all of us,” Tsilou says. “But now, after all these years of crisis, all of us understand fully the dangers of being out of the euro zone and now we are confident that the likelihood of that happening is remote.”

    Not all is perfect, of course, and Tsilou notes that “the consequences of the crisis are still here.” She reports that the biggest challenge for investors and domestic clients right now in Greece, “is still the uncertainty.” Current reforms in the country, unstable tax rates and bureaucracy, remain “serious impediments” for investors, she explains. In addition, there are still risks in capital controls, since the Greek government continues to impose restrictions —although relaxed — on money withdrawals outside Greece.

    However, the adjustment program has brought positive changes in the public sector too, including efforts to modernize the public administration, reduce bureaucracy, and “help and expedite procedures in investment,” Tsilou says. These changes, she says, were necessary to make “all procedures effective and completed on time.” In addition, procedures related to judicial reform, bankruptcy and pre-bankruptcy procedures, NPLs, privatizations, and enforcement have been improved in the context of the adjustment program. 

    Among the most recent legislative changes are an e-auction that started at the end of February of this year, Tsilou says, describing it as an important tool in the context of enforcement. “Enforcement procedures were difficult, and e-auctions present important advantages for all interested bidders” she says. “The law on NPLs that was enacted almost two years ago sets also a significant set of rules and opened the way for an important number  of NPL transfers to  be completed.”

    Tsilou reports that another area attracting an important amount of interest now in Greece relates to the placement of problematic businesses, mainly as going concerns, into a special administration procedure, which  eventually leads “to a more quick and efficient sale of the assets of the borrower.” She reports that “it is expected to be one of the most frequently used reorganization tools.”

    In the long run, Tsilou sees an opportunity for growth in Greece. “The most promising areas are of course the NPLs and M&A and capital market deals with a focus on the tourism sector,” she says. Although she notes that in the privatization area there is still work to be done, “many privatization projects are already completed and for others the process is currently ongoing.”

    Ultimately, she says, she’s hopeful. “We are quite optimistic that things are going to be better for everyone here in Greece and that 2018 will be the beginning of the end of the financial crisis in Greece.”

     

  • Greece: An Emerging Energy Hub in the SE Mediterranean

    Greece: An Emerging Energy Hub in the SE Mediterranean

    Greece has long been a regional energy market. However, drastic changes have been taking place which have the potential to transform Greece to an energy hub in the South Eastern Mediterranean region. The first step was made with the inauguration of the Greek-Turkish gas pipeline at the beginning of the millennium.   

    Infrastructure Projects

    Important infrastructure projects — such as the TAP pipeline, which will transport Azeri gas via Greece to Italy, and the Euroasia Interconnector, which will connect the Electricity Transmission Networks of Greece, Cyprus, and Israel — are reshaping the Greek energy market. Such infrastructure projects will allow the Greek energy markets to become fully interconnected, and thus highly competitive. This development, combined with a set of important ongoing and anticipated oil exploration projects, could transform the Greek Energy Market into a truly mature market. A word of caution though: the on-time completion of projects is critical. Completing the infrastructure projects on time is not only a necessary prerequisite for the opening of the market, but would also send a strong signal to investors that the Greek State is dealing with these issues with the necessary determination.

    Liberalization of Electricity and Gas Markets

    In past years remarkable efforts were made to liberalize the Greek energy markets. That said, although Greece has properly transposed the electricity and gas EU directives, due to structural inefficiencies and regulatory inadequacies, no real and satisfactory opening to competition has been achieved. However, this seems to be changing.

    The Electricity Sector

    In the Electricity sector Greece has adopted legislative measures to fully implement the EU Target Model.  theIn wholesale market, the mandatory pool system will be replaced by a new system, consisting of a day-ahead market, an intraday market, an imbalances market, and a financial term products market. These mechanisms will be coupled with an Energy Exchange created according to EU standards. Furthermore, new rules will apply to ensure the short and long term stability and security of the system. These new rules are compatible with EU requirements and will be based on the principle of competition in order to minimize the distortive effect. New rules will also apply, in line with EU approvals, for the promotion of renewable sources of energy (RES) projects. RES subsidization rules will allow the combination of high environmental standards with the principle of free competition. The entry of a strategic investor in the Transmission System Operator (TSO) has already been completed, and the TSO now operates according to the so-called “full ownership unbundling regime.” Market participants are responding positively and a private suppliers in the downstream market have developed an increasing market share.

    The Gas Sector

    Remarkable progress has also been made in the Gas sector. The privatizations of the incumbent operator (DEPA) and the Transmission Network Operator (DESFA) are ongoing and, once completed, will allow the implementation of the full ownership unbundling model in the gas sector as well. Perhaps most importantly, the unbundling of the gas distribution networks from supply activities has been completed and from January 1, 2018 onwards, all customers, both residential and industrial, are now able to choose their suppliers, which is expected to boost competition in the downstream markets.

    New Era for Oil Exploration and Exploitation

    In the Oil Exploration sector, important multinational operators have expressed a strong interest in several new tenders, including, in particular, the promising potential offshore oil fields in West Greece and the Crete Sea area. The Greek State has delegated the management of its exploration rights to a specialized entity — the Hellenic Hydrocarbon Resources Management SA (HHRM) — to promote the procedures for oil research, extraction, and exploration more efficiently. In parallel, the ongoing privatization of the dominant player in the Greek oil market — HELPE — is expected to generate additional market interest. 

    The combination of all these developments could effectively transform Greece into a real energy hub in the Southern Mediterranean Area. Regulated industries such as energy markets are largely state driven. That does not mean that private initiatives are not necessary and extremely important. Inevitably, however, in order to be incentivized, investors need to have a regulatory framework that is clear, stable, and business-friendly, and which ensures a level playing field. Therefore, the willingness and determination of the Greek State to complete the ongoing projects and reforms in the Energy Sector both timely and effectively will be the decisive factor for achieving this ambitious objective. 

    By Vassilis Karagiannis, Partner, KLC Law Firm

  • Orrick and Ince & Co Advise on the Sale of HEC Europe

    Orrick and Ince & Co Advise on the Sale of HEC Europe

    Orrick’s London team has advised Precitox Holdings, Oratosio Holdings, and Humberto Finance on the USD 367 million sale of 100% of the share capital of H.E.C. Europe Limited to Aegean Marine Petroleum Network. Aegean was advised by Ince & Co and Seward & Kissel.

    H.E.C. Europe is the parent company of Hellenic Environmental Center and a group of companies that together provide global port reception facilities services.

    The purchase price includes the assumption of certain indebtedness, payable via a combination of debt, the assignment of certain accounts receivables, cash and shares of Aegean common stock.

    The acquisition, which does not require the approval of Aegean’s shareholders, was unanimously approved by the Aegean Board upon the recommendation of a special committee of independent directors.

    Orrick’s team advising the sellers included Partners Ed Denny and Shawn Atkinson, supported by Associate Bridget Winters.

    The Ince & Co team was led by Partners Matthew Stratton and Stephen Jarvis. 

     

  • Foreign Direct Investment in Greece Rebounds in 2017

    Despite the severe economic crisis Greece has been facing over almost a decade, the country’s performance in dragging in foreign investment throughout the years has established a rather impressive track record. So far, 2017 has definitely been a year of increased economic, commercial, and corporate activity, and of gradually improving financial circumstances.

    In late October the Greek Ministry of Finance issued a bulletin on the year’s national financial and economic developments, pointing out, inter alia, that all economic indicators confirmed an upward economic outlook, portending an increase in competitiveness and commercial activity. The same report expressed the optimistic view that foreign direct investments (FDI) are expected to surpass EUR 4 billion in total by the end of the year, “based on the seven-month period performance and the overall performance of FDI in previous years,” with GDP growth drifting towards the annual target of 1.8%.

    The rebound in foreign direct investment is welcome news for Greece, which is struggling to boost growth and fend off investor fears of market volatility and financial insecurity. The completion of the latest EU program review in early December certified a buoyed business confidence index, a slightly increased manufacturing purchasing managers index compared to the previous trimester, and a steadily increasing private productive investments rate. At the same time, the feeling that it is about time for the EU to leave the Greek crisis saga behind pervades both EU governments and Greece, which wishes to keep providing the Eurozone with comfort as regards its economic future.

    The most recent data available from the Bank of Greece shows that Greece continues to receive most of its FDI flows from other EU member states (including all of its top five sources: Germany, Luxembourg, the Netherlands, France, and Switzerland). The USA and Canada are also among the top ten source countries of foreign investment in Greece during the last decade, significantly increasing their investment presence over the last few years.

    In terms of the main investment sectors, records show that foreign investors feel safer investing in areas such as real estate, manufacturing, trade, information and telecommunications, banking/finance, and energy/oil and gas.

    Despite ongoing economic uncertainty throughout the years, Greece has, surprisingly, managed to maintain a satisfactory position on the FDI map – with the exception of last year, which saw only a few foreign investment deals in the country. Greece’s talent to drag in foreign investors even in the direst times is mainly due to a series of traits providing Greece a competitive advantage compared to the remaining Euromed region. 

    Greece is a highly strategically-positioned country, geographically positioned at the crossroads of Europe, Asia, and Africa. As a member of the EU and the Eurozone, Greece provides investors with access to high-growth and emerging regional markets, and it is highly competitive in terms of trade, infrastructure, and human resources. In addition, Greece provides foreign investors with three highly attractive sectors: commercial real estate, shipping, and tourism, as long-term projections indicate strong prospects for tourism, multiple opportunities related to upgrading or updating infrastructure, and a renewed interest in commercial real estate, mostly related to yield investments, especially in quality real estate with prime tenants. On the same note, Greek shipping is one of the strongest sectors in the world and comes right after tourism in terms of economic contribution, generating high demand for maritime transportation products and services.

    Having ensured that FDI inward flow is on a steady track, the Greek government is planning to implement a series of measures in order to motivate and launch foreign productive investments in Greece. To this end, the Greek Ministry of Economy has announced that negotiations are underway with respect to the EU funding of the Infrastructure Fund, which will be managed by the EIB and will focus on promoting PPPs in order to tackle a lack of liquidity and provide the necessary mentoring/coaching to create a healthy environment for boosting entrepreneurship. It remains to be seen whether this proposed approach and these protection schemes and investment mechanisms will succeed in attracting long term FDI and completely restore the trust of foreigners wanting to invest their money in Greece.

    By Panagiotis Drakopoulos, Senior Partner, and Mariliza Kyparissi, Senior Associate, Drakopoulos 

    This Article was originally published in Issue 4.12 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

  • Three New Junior Partners at Manousakis

    Three New Junior Partners at Manousakis

    Sofia Kallianteri, Konstantina Stampelou, and Alexia Mandrali have joined Greece’s Manousakis law firm as Junior Partners. 

    According to Manousakis, Sofia Kallianteri “has working experience with the World Trade Organization where she provided high-level, proactive legal support in Dispute Settlement Procedures, and [she] has worked with the French National Agency for Medicines in Paris, providing legal assistance to pharmaceutical industries. She is experienced in corporate law, pharmaceutical law, food law and international trade law, and has various publications with regard to pediatric medicinal products, competition law, and pharmaceutical industries, as well as pricing of medicinal products.”

    Konstantina Stampelou specializes in the field of commercial and contract law. According to Manousakis, “her main practice focuses on contract, corporate, and public procurement matters, including the negotiation, execution, and enforcement of all types of commercial agreements. Before entering the firm, Konstantina served as Consultant to the Prefecture of Peloponnese and the Preferred Bidder on the acquisition of Astir Palace Vouliagmeni SA, providing legal advice on the implementation of investment projects.”

    Alexia Mandrali is dual-qualified in both New York and Greece. According to Manousakis, “Mandrali has drawn experience as an expert legal counsel for Deloitte Touche Tohmatsu LLC, where she obtained experience on international transactional law and provided legal advice for domestic and international corporate issues. She also possesses significant litigation experience before the Supreme Court of the State of New York, acting as a Supreme Court litigator for civil and commercial law cases.”

     

  • Quasi-Judicial Tax Recourse: Saving Time (and Money) in Disputes with Tax Authorities

    Almost four years ago, under pressure from its European partners and the IMF exercised by means of economic adjustment programs and loan agreements broadly known as “memoranda,” the Greek State adopted a new tax procedural code.

    The main aim of the Greek Government in adopting the new code was – in a bet against all odds – to apply a more efficient tax implementation regime. Traditionally, tackling tax evasion had been a dead end; pre-election statements made by the various governments against professional tax evaders were not followed by substantial actions, and therefore the fiscal gap in the state budget grew in geometric proportion. In any case, the need for tax collection cannot just echo as “wishful thinking,” since effective tax collection mechanisms are imperative for the viable function of the state. In this context, the legal regime adopted into Greek reality seemed represent the ultimum refugium.

    By virtue of L. 4174/2013 (the “Tax Procedure Code”), a new, more flexible, and agile tax imposition scheme was adopted, which provides for: (a) a vast number of tax audits to be conducted on a “fast track” basis; (b) the implementation and incorporation of new technologies into fiscal mechanisms; and (c) turning the tackling of tax evasion once and for all into a first page note on the political agenda. 

    However, even a new Tax Procedure Code cannot keep audit reports from occasionally being incorrect and tax payers occasionally being threatened with major penalties even where it is evident that no tax violation has been committed. Thus, the Greek legislator chose to introduce a quick and in-depth re-examination of audit reports in the form of a “quasi-judicial” recourse as a counter-balance to the new taxation process, with the added benefit that the constitution of an out-of-court tribunal with extensive authority would facilitate the decongestion of cramped Administrative Courts, where, at the moment, judicial review of tax imposing acts usually occurs almost five years after submission.

    The “quasi-judicial” regime was introduced by virtue of art. 63 of the Tax Procedure Code, which states that each taxpayer who wants to challenge an act or omission of the tax authorities shall be entitled to file a claim before the authority which issued (or failed to issue, as the case may be) the relevant act. Subsequently and by virtue of authorization transferred to the Governor of the Independent Public Revenues Authority, circular No. 1064 /27.4.2017 was issued, describing the process by which the right to file the claim is to be exercised. The “quasi-judicial” claim must be filed within 30 days from the date the taxpayer is notified of the relevant act. The competent authority to hear the recourse is the Directorate for the Resolution of Tax Disputes, a quasi-judicial body with full power to modify or even fully annul the challenged act. Its decision must be issued within 120 days of filing; otherwise it shall be regarded as tacitly rejected. What is more, the claim is a precondition for filing a judicial action at a later stage, since direct challenge before an administrative court is forbidden. Filing the quasi-judicial claim suspends payment of 50% of the imposed tax and penalties. However, the applicant is free to file a full tax imposition suspension application with the same authority. 

    Recent experience shows that this new regime has rectified many irregularities of the previous tax imposition scheme. At no cost (apart from legal fees, in cases where taxpayers are represented by lawyers), anyone can ask to have his or her tax case reexamined. As the Directorate has extensive power to investigate the accuracy of the audit reports, to ask for complimentary evidence and with complete transparency, the “quasi-judicial” regime must be praised as an important development in Greek Administrative Law. As tight time frames are set for the issuance of final decisions, parties can expect that their cases will be heard and resolved within a short period of time, while still reserving their right to bring a judicial action. In addition, the introduction of the new tax recourse regime seems very appealing to prospective investors who are confident that any dispute against the Greek State on tax issues will be resolved in a timely manner – providing at least one more reason why they should invest in Greece.

    By Panagiotis Drakopoulos, Senior Partner, and Evangelos Margaritis, Senior Associate, Drakopoulos

    This Article was originally published in Issue 4.11 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

  • DLA Piper and Alexiou-Kosmopoulos Advise Marguerite Fund on Acquisition of Interest in Fraport Greece

    DLA Piper and Alexiou-Kosmopoulos Advise Marguerite Fund on Acquisition of Interest in Fraport Greece

    DLA Piper has advised the Marguerite Fund on its acquisition of a 10% stake in Fraport Greece, the owner and operator of 14 regional airports in Greece. Greek counsel was provided by Alexiou-Kosmopoulos in Athens.

    The stake was sold by Slentel, a company of the Copelouzos Group, which remains a minority shareholder in the company alongside Fraport AG.

    The transaction, which closed in December 2017, marks the 20th and final investment of the Marguerite Fund. Fraport Greece is expected to invest approximately EUR 400 million to improve and expand the airports’ infrastructure by 2021.

    DLA Piper advised on the negotiation and the documentation of the investment agreements, conducting due diligence on the concession, project, and finance documents regarding Fraport Greece and the project.

    London-based DLA Piper Finance & Projects Partner Dimitri Papaefstratiou, who led the team, said: “We are delighted to have advised on this acquisition, which will catalyze positive investment into the Greek economy. Tourism is one of Greece’s most crucial industries. Looking to the future, activity within this significant sector will bring multiple benefits, at both a national and a regional level, including the creation of employment opportunities.”

    In addition to Papaefstratiou, the London-based team included Partner Christopher Baird, Counsel Harry Brunt, Senior Associate Joseph Lam, and Associate Charles Orphanides.

    The Alexiou-Kosmopoulos team was led by Partner Alexandros Kosmopoulos and included Partner George Zohios and Associates Kostas Fatsis and George Palogos.

    DLA Piper declined to identify other firms working on the deal.

     

  • Kyriakides Georgopoulos Advises Lenders on Refinancing of McArthurGlen Designer Outlet

    Kyriakides Georgopoulos Advises Lenders on Refinancing of McArthurGlen Designer Outlet

    Kyriakides Georgopoulos has announced that it acted as Greek law counsel to a consortium of lenders consisting of Alpha Bank, Piraeus Bank and HSBC London Plc, Greek Branch for the refinancing of the McArthurGlen Designer Outlet in Athens. On Greek law issues the lenders’ consortium was also advised by KG Project Finance team together with the Athens office of Norton Rose Fulbright, which acted as the lenders’ English law counsel.

    The McArthurGlen Group is a European owner, developer, and manager of designer outlet centers.              

    The KG team was led by Partner Ioanna Antonopoulou, supported by Angeliki Chalikia, Antonia Nedelkopoulou, Maria-Thomais Epeoglou, and Apostolos Kourtis.

  • Kyriakides Georgopoulos Provides Greek Law Counsel to EBRD on Loan to Cosmote Mobile Telecommunications

    Kyriakides Georgopoulos Provides Greek Law Counsel to EBRD on Loan to Cosmote Mobile Telecommunications

    The Kyriakides Georgopoulos Law Firm has acted as Greek law counsel to the EBRD in relation to the EUR 150,000,000 loan agreement entered into by (among others) the EBRD as lender, Cosmote Mobile Telecommunications S.A. as borrower, and Hellenic Communications Organization S.A. as guarantor. 

    Kyriakides Georgopoulos worked with CMS Partner Simon Dayes, who acted as English law counsel.

    According to KG, “the proceeds of the loan will be used for the financing of capex needs of the borrower and will facilitate the development of energy efficiency projects. This is one of the major financing agreements concluded by institutional lenders in the 3rd quarter of this year.”

    The KG team was led by Banking & Finance Head Partner Konstantinos Vouterakos, assisted by Counsel Yannis Erifillidis and Associates Dimitris Dimitriadis and Fotoula Kostourou.