Category: Latvia

TGS Baltic has advised Eco Baltia on its inaugural EUR 8 million issuance of three-year bonds. Eversheds Sutherland acted as trustee for the issuance.

According to TGS Baltic, “the maturity date of the bonds is set on February 17, 2026, with an option for the issuer to call the bonds after two years. The nominal value of a bond is EUR 1,000, and the interest rate (coupon) of 8% is fixed for the whole period […] The proceeds raised will be used to finance future development projects of Eco Baltia, with a focus on supporting the company’s expansion plans in Europe and promoting the circular economy.”

Eco Baltia is an environmental and waste management group in the Baltics, managed by private capital fund INVL Baltic Sea Growth Fund. Eco Baltia provides full-cycle waste management solutions, from waste collection and sorting to secondary raw material logistics, wholesale, and raw material processing.

TGS Baltic’s team included Partners Vidmantas Drizga, Inese Hazenfusa, and Dalia Augaite and Associate Martins Galzons.

The Eversheds Sutherland team included Senior Associate Justine Ignatavicute and Associate Karlis Jekabs Ivans.

Sorainen has helped BITE Latvija obtain the rights to use frequencies enabling 5G services.

BITE Latvija is one of the biggest ICT companies in Latvia providing mobile and fixed communication services, the firm informed.

According to Sorainen, “in order to start providing 5G services, Bite Latvija needed to acquire permission from the Latvian Public Utilities Commission to jointly use the 3.6 GHz frequencies held by Unistars, a company 100% owned by Bite Latvija […] After a thorough assessment, on February 9, 2023, PUC adopted a decision allowing Unistars to share frequencies with BITE Latvija. This opens the door for BITE Latvija to finally launch 5G services for its hundreds of thousands of clients in Latvia, which will boost competition in the market while also making the whole Latvian economy more competitive.”

In 2019, Sorainen advised BITE on the acquisition of Baltcom (as reported by CEE Legal Matters on October 9, 2019) and on its partnership with Tele2 for 5G network development (as reported by CEE Legal Matters on July 1, 2019).

Sorainen’s team included Partners Ieva Andersone, Valts Nerets, and Laimonas Skibarka, Senior Associates Linda Reneslace and Marika Grunte, and Associate Arturs Kazaks.

Sorainen has advised the Riga Energy Agency on the development of a concept and business model for the Riga Energy Efficiency Fund.

According to Sorainen, “the development of the REEF concept is a crucial step towards the city co-financing energy-efficient renovations of resident homes. The implementation of REEF would help achieve Riga’s climate goals, saving 410,784 megawatt-hours of energy per year and reducing [carbon dioxide emissions] by 59,563 tonnes” per year.

The REEF will be able to “independently attract new funds, in order to finance the necessary funds for the renovation of the housing fund,” the firm informed.

Sorainen’s team included Partner Rudolfs Engelis and Senior Associates Santu Rubinu, Katrini Plavinu-Miku, and Nataliju Graveli.

TGS Baltic has advised Vilnius-headquartered renewable energy company Green Genius on its acquisition of a 100-megawatt solar PV project in Latvia.

According to TGS Baltic, “as announced by Green Genius, the power plant shall be fully authorized and ready for construction by June of this year. The total planned investment into this solar project will be around EUR 90 million. The project is expected to save 100,000 tons of carbon dioxide yearly and secure renewable energy for about 41,000 households.”

In 2022, TGS Baltic advised Green Genius on its acquisition of an 85-megawatt wind farm in Lithuania (as reported by CEE Legal Matters on February 23, 2022).

The TGS Baltic team included Partner Agnese Hartpenga, Associates Elina Lesnicenoka and Evija Abele, and Junior Associate Anete Neretniece.

TGS Baltic could not provide additional information on the deal.

Sorainen has advised Tietoevry on its lease agreement with developer Capitalica for office space in the Verde office center in Riga’s Skanste district.

Tietoevry is a Finnish IT software and service company providing IT and product engineering services.

According to Sorainen, “Tietoevry and the developer of the Verde office center have signed a lease agreement, according to which Tietoevry will lease office space with an area of 4,500 square meters in the B building at the Verde office center, becoming its largest tenant. The leased premises will be used for the purposes of the Tietoevry Latvia office. It is planned that the Latvian branch of Tietoevry will move to the new premises in 2024.”

Sorainen’s team included Partner Jorens Jaunozols and Associate Annija Straupe.

Sorainen could not provide additional information on the deal.

Cobalt has advised Lightrock and Haniel on leading a USD 30 million investment round into Aerones. 

“The raised USD 30 million capital will be used to grow Aerones technical and sales functions, increase the number of robot service teams, and expand into new fast-growing markets, including Africa and Australia,” the firm informed.

Aerones is a Latvia-based robotic wind-turbine maintenance services provider. According to Cobalt, the company “already serves customers that represent 50% of the world’s wind power capacity. Aerones’ innovations are reducing costs and inefficiencies in the global wind power industry.”

Lightrock is a private equity platform investing in sustainable businesses. Haniel is a family-run growth equity investor in Europe.

The Cobalt team included Partner Toms Sulmanis and Associate Agnese Gerharde.

Cobalt, working with Clifford Chance, has advised joint lead managers Deutsche Bank, Citigroup Global Markets Europe, Erste Group, and Nomura Financial Products Europe on the EUR 750 million issuance of five-year eurobonds by the Republic of Latvia. Allen & Overy reportedly advised the Treasury of the Republic of Latvia.

“According to the Treasury of the Republic of Latvia, the eurobond issuance benefitted from one of the largest order books since 2015 reaching EUR 3.7 billion,” Cobalt informed. “There was interest from more than 140 investors. Bonds were allocated mainly to investors from European countries, for example, the UK, Germany, Austria, the Nordic countries, France, Benelux, and others.”

Cobalt had recently advised the same joint lead managers on Latvia’s previous EUR 850 million issuance of four-year eurobonds (as reported by CEE Legal Matters on November 11, 2022).

The Cobalt team was led by Partner Edgars Lodzins.

Ellex has helped Merito Partners set up and launch its Merito Management AIFP alternative investment fund structure in Latvia.

According to Ellex, “investment company Merito Partners has started making investments in the New Nordic market. During its first months, it has attracted 30 investors and financing totaling EUR 17 million. Merito currently manages two investment strategies – private equity and sustainable energy. Merito aligns its interests with those of ambitious entrepreneurs and supports portfolio companies in achieving sustainable growth, operational excellence, and market leadership.”

According to the firm, Merito Partners’ subsidiary Merito Management AIFP is “an alternative investment fund manager regulated by the Bank of Latvia.”

The Ellex team included Partner Ivars Pommers, Senior Associate Marta Cera, and Associates Niklavs Zieds and Kristers Toms Losans.

Ellex has advised AS CleanR Group on its completed acquisition of SIA RSC Noma. Sole practitioner Nauris Durevskis advised the sellers.

CleanR “has concluded the transaction and gained ownership of RSC Noma following a positive decision from the Competition Council,” Ellex announced. 

According to the firm, “RSC Noma is joining the CleanR Group – Latvia’s leading group of companies in the environmental services sector – which means joining the group’s standards regarding sustainability, modernization, and digital development.”

“The decision to acquire RSC Noma, which operates in the field of construction waste container rental, construction debris removal, and management, was made this summer,” Ellex reported. “One of the main goals of the transaction was to ensure RSC Noma remained on the market, and also the development in the long-term unstable economic conditions with rapidly growing energy resource prices and rising inflation.”

Ellex’s team included Latvia-based Partner Peteris Dalderis, Senior Associates Inga Priedite, Anete Dimitrovska, Inese Freivalde, and Beata Plociņa, and Associates Ineta Kanepe and Kaspars Olsevskis.

Much like in other countries in the region, Latvia experienced a strong finish to 2022, with bustling M&A activity being driven primarily by the current geopolitical and economic developments, according to Vilgerts Partner Julija Jerneva.

“With the end of the year so near, everybody was rushing to wrap projects up, so it was a very busy period,” Jerneva begins. “We are seeing surprisingly high levels of M&A activity related to the currently imposed sanctions on Russia in particular.” She explains there is a number of Russian-owned assets that are, for all intents and purposes, frozen. “The assets, that would otherwise remain frozen with business operations suspended, would be sold – the proceeds from the transactions still frozen, to comply with the sanctions regime,” she explains. “Additionally, there is a deadline until which such assets could be sold: initially, it was December 30, 2022, but it has since been pushed back to February 28, 2023.”

Aside from high investor interest in these frozen “toxic” assets, Jerneva reports an overall investment climate that is quite vibrant. “It appears that investors are employing a ‘no time like the present’ approach when it comes to placing funds. This is likely driven by a fear of incoming high inflation,” she explains. And the inflation rate is indeed very high – standing at 21.8% in December. “There hasn’t been an evident pattern to these investments, but rather a really very wide scope of targets,” she says, indicating that investor preference dictates activity. “Of course, one could draw a conclusion that the real estate sector is performing above and beyond, but there is also ample activity elsewhere.”

Jerneva goes on to say there is a lot of pressure on companies to alter their business approach. “With the inflation rate being where it is, many businesses are under pressure to amend their long-term agreements and contracts. In particular, this has led to an uptick in employment-related work.” According to her, financial uncertainty and the still-present COVID-19 are pressuring labor-intensive sectors to transform. “On the one hand, the employees are feeling the need to increase their income on account of the inflation, while employers, on the other hand, are feeling the need to restructure their operational models.” Still, the unemployment rate in Latvia stands at 6%, which Jerneva characterizes as “stable, given the current geopolitical and economic context. The burn is spread out evenly on all business sectors, with services, perhaps, feeling it the most.”

Finally, looking at recent legislative updates of note, Jerneva reports little to no activity. “The new government and the new parliament have just come to be, following the elections. It is still very, very early to tell how the new legislative and ruling bodies will set their priorities.” Jerneva says the “balance of power between the parties has shifted with these elections. Right now, we have to wait and see what kind of priority list emerges.”