Category: Latvia

TGS Baltic has advised Sweden’s Bethoc on its acquisition of Sport Revolution from JLSR and Xstunda. Sole practitioners Ilze Lejina and Reinis Sokolovs reportedly advised the sellers.

“As a result of the transaction, a natural person, the 100% shareholder of JLSR, one of the previous shareholders of Latvian company, continued with Bethoc by receiving a stake in Bethoc in exchange for [the JLSR-owned 50% stake in] Sport Revolution,” TGS Baltic informed. “At the same time, a natural person, the 100% shareholder of Xstunda, the other previous shareholder of the Latvian company, exited by selling [the Xstunda-owned 50% stake in] Sport Revolution.”

Bethoc is a Swedish hockey training aids seller. Sport Revolution is a Latvian ice hockey, floorball, and field hockey training aids seller.

The TGS Baltic team included Partner Andra Rubene, Senior Associate Anna Vaivade, and Associate Kaspars Treilibs.

Cobalt has advised Samsung C&T on its investment and business collaboration with Latvian industrial manufacturer Forta Pro.

“This collaboration marks an important step to combine and merge the two companies’ industrial know-how and experience, which can turn around conventional construction market practices in Latvia and beyond and become a leading global modular construction company,” Cobalt reported. “The companies are planning to launch and operate modular construction factories worldwide, which will increase the presence of the high value-added Latvian knowledge-based production in the global construction markets.”

South Korean Samsung C&T specializes in housing, offices, industrial buildings, infrastructure, and power plant construction.

Forta Pro is a Latvian modular construction company, specializing in the construction of modular high-rise buildings, with production facilities in Jelgava and Ventspils.

The Cobalt team was led by Partner Indrikis Liepa and Senior Associate Diana Zepa and included Senior Associates Inga Tenisa, Ivo Maskalans, Liga Fjodorova, Maija Tipaine, and Juta Meimere, and Associate Agnese Gerharde.

Cobalt has advised the European Investment Bank on granting a EUR 39 million loan to plywood manufacturer Latvijas Finieris Group.

The Latvijas Finieris Group is a Latvian mid-cap manufacturer of birch plywood.

According to Cobalt, the loan is intended “for investments in research and development and to modernize and expand the integrated birch plywood production facility at Lignums and at Verems. The agreement comes under the Investment Plan for Europe, supporting sustainable investment, innovation, and job creation in Europe. Through this first loan agreement with the EIB, Latvijas Finieris is seeking to improve the efficient use of natural resources and aims to reduce the environmental footprint of its operations.”

“I welcome this agreement with the EIB, which, backed by the EU budget guarantee, will support both Latvijas Finieris’ investments in research and development and its capacity expansion, while reducing its environmental footprint,” European Commission for an Economy that Works for People Executive Vice-President Valdis Dombrovskis commented. “Birch plywood manufacturing is an important sector in Latvia, with a key stake in the country’s labor market and global standing as a lead producer in the bioeconomy. We will continue to help businesses like Latvijas Finieris access the funding they need to keep on innovating, scale up, and foster job creation.”

In 2022, Cobalt advised Latvijas Finieris on launching its Latgale investment project (as reported by CEE Legal Matters on August 1, 2022).

Cobalt’s team included Partner Edgars Lodzins, Senior Associate Inga Tenisa, and Junior Associate Maira Puzule.

A strong end to 2022, embodied by high levels of real estate transactions and M&A work – despite a legislative downturn and no government – is the buzz in Latvia, according to BDO Law Managing Partner Vita Liberte.

“It has been a super busy period lately,” Liberte begins. “The final two months of the year are usually very busy for us, and this year is no different. Primarily, all this action is driven by real estate transactions and a high volume of M&A activity,” she reports. Liberte says that the investment interest is “both domestic and international, primarily focusing on commercial and residential projects.”

Liberte goes on to explain that, as a peculiarity, a high number of transactions are self-funded by investors. “I don’t know whether it’s due to savings made during the bearish periods of COVID-19 lockdowns, but it would seem that investors are, frequently, funding their own endeavors and are not looking to the financial sector as much,” she reports.

Additionally, Liberte reports an uptick in restructuring work. “A number of companies are pivoting and turning to different markets, even Kenya and Vietnam, for example,” she says. “These are, by and large, fintech clients seeking new markets. There is a lot of investment interest in Latvian IT companies, and we feel it growing stronger every day,” she adds, attributing the vibrancy of the IT sector to the transactional frequency she mentioned earlier.

As for the other business sectors, Liberte reports that “there are some struggles with real estate construction, on account of rising materials and energy costs. There is also a shortage of qualified labor,” she points out, “all of which contributes to a somewhat stressful environment for construction companies.”

Finally, Liberte shares a report on the current status of legislative activities in Lativa. “We have had elections in October, and a new government is yet to be formed,” she says. “There have not been any new legislative developments because of this, given that the parliament is still new and that we are still expecting the leadership to be formed.” Liberte says that the “long setup of the new government and parliament” is attributable to “the politicians focusing more on their own internal affairs. No one really knows when things will move along and when we will actually see a new government in place,” she concludes.

Cobalt has advised the BaltCap Private Equity Fund III – acting through its subsidiary Adoro – on acquiring the assets of Dzives Abece.

Dzives Abece is a social care center in Latvia, founded in 2018 and operating a 97-bed facility in Riga.

According to Cobalt, “with the investment, BaltCap aims to diversify the range of high-quality care services in Latvia for seniors and other client groups, such as post-treatment rehabilitation and dementia patients.”

Cobalt’s team included Partner Guntars Zile, Senior Associates Diana Zepa and Juta Meimere, and Associate Arturs Valdersterns.

Cobalt, working with Bech-Bruun, has advised Danone company Nutricia on its intra-group restructuring by incorporating Danone SIA into Nutricia SIA.

According to Cobalt, the merger of the Latvian companies was part of a wider cross-border group restructuring in Scandinavia and the Baltic States.

Danone is a food group producing dairy products, beverages, baby foods, and medical nutrition products.

The Cobalt team was led by Partner Gatis Flinters and Senior Associate Marija Berdova and included Partner Sandija Novicka and Senior Associate Ivo Maskalans.

Cobalt has advised BaltCap Latvia Venture Capital Fund and funds managed by Imprimatur Capital, together with other shareholders, on the sale of Blue Bridge Technologies to Everfield. BDO Law advised Everfield on the deal.

Blue Bridge Technologies is a provider of medical practice management systems in Latvia.

Everfield is a specialized software investor backed by private investment firm Aquiline Capital Partners. 

Cobalt’s team included Partners Guntars Zile and Sandija Novicka and Senior Associate Diana Zepa.

BDO Law’s team included Managing Partner Vita Liberte, Head of Legal Raivis Leimanis, Counsel Janis Zacests, Senior Associates Janis Ciguzis, Agrita Vindaca, and Irita Aleksejenkova, and Associate Sabine Smilts as well as Germany-based BDO Legal Partner Thorsten Schumacher.

Editor’s Note: This article was amended on November 28, 2022, to correct a spelling error and update BDO’s team composition.

Cobalt, working with Clifford Chance, has advised joint lead managers Citi, Deutsche Bank, Erste Group, and Nomura on the EUR 850 million issuance of 4-year eurobonds by the Republic of Latvia. Allen & Overy reportedly advised the Republic of Latvia.

According to Cobalt, the “eurobond issuance benefitted from a strong order book of over EUR 2.1 billion and interest from more than 80 investors. Bonds were allocated mainly to investors from European countries, for example, Germany, Austria, the Nordic countries, Switzerland, Benelux, and others.”

The Cobalt team was led by Partner Edgars Lodzins.

Cobalt has successfully represented biogas power plants Ziedi JP, AD Biogazes Stacija, Bio Future, Gas Stream, Conatus Bioenergy, International Investments, Agro Lecava, RZS Energo, and Macibu un Petijumu Staimnieciba Vecauce before Latvia’s Constitutional Court in a dispute related to specific requirements for the efficient use of thermal energy under mandatory procurement.

“The matter was initiated upon the application of several biogas power plants,” Cobalt informed. “The applicants objected to certain requirements relating to the use of useful heat in the cogeneration process, as well as to the linking of this use to the determination of the amount of electricity sold under mandatory procurement. According to the applicants, the mentioned requirements were impossible to fulfill.”

According to the firm, the Constitutional Court held that the disputed regulations concerning the calculation of the coefficient of performance applied to producers using biogas in cogeneration are incompatible with the Constitution of the Republic of Latvia. Consequently, the court declared the disputed norms invalid as of July 1, 2023. “However, regarding the applicants, the above provisions were declared invalid as of January 1, 2021,” the firm reported.

The Cobalt team included Managing Partner Lauris Liepa and Senior Associate Toms Krumins.

Cobalt has advised energy infrastructure contractor Enersense SIA on the formation of a joint venture with Siemens Energy Global.

Enersense SIA is a Latvian subsidiary of Enersense, an international group of energy and technology companies. 

According to Cobalt, “the joint venture was formed to supply and install three synchronous condensers for Latvian transmission system operator Augstsprieguma Tikls. The total contract value is EUR 114 million.”

According to the firm, “the construction of synchronous condensers is one of the projects to strengthen the transmission system infrastructure. This project is necessary for the synchronization of the Baltic electricity system with Continental Europe, which is planned for 2025. The synchronous condensers will be installed in three substations of the power transmission system – Ventspils, Liksna, and Grobina, all located in Latvia.”

Cobalt’s team included Partner Gatis Flinters and Senior Associate Martins Tarlaps.

Cobalt did not respond to our inquiry on the matter.