Category: Latvia

Ellex has advised the coordinating committee of ED&F Man Group’s senior creditors in refinancing and extending the group’s financial debt, with the transaction taking place simultaneously in over 30 jurisdictions.

ED&F Man is a global commodities trader and broker. According to Ellex, “like many businesses in the commodities sector, ED&F Man has faced significant pressures arising out of the COVID-19 pandemic and soaring commodity prices.”

The Ellex team in Latvia included Associate Partner Valters Diure and Senior Associate Anna Misneva.

Ellex did not respond to our inquiry on the matter.

Editor’s Note: After this article was published, Havel & Partners informed CEE Legal Matters that it had advised the ED&F Man Group on the local aspects of its USD 1.5 billion restructuring in the Czech Republic. The firm’s team included Partner Filip Cabart and Legal Expert Ondrej Falta.

Walless has advised Lumi Capital on its acquisition of the Indi Business Center in Riga.

According to Walless, the Indi center is “a modern multi-tenant office building in the Ganibu Dambis commercial area … The building has 12,000 square meters of net leasable area with further development volume. The four-floor building was reconstructed from the historical Riga Electric Machine Building Plant industrial building in several stages from 2008 to 2022.”

The Walless team included Managing Partner Kristine Gaigule-Saveja, Partner Inguna Abele, Associate Partner Andis Ozolins, Senior Associates Baiba Krievina-Sutora and Tatjana Sinkevica, and Associate Ieva Gaile.

Walless did not respond to our inquiry on the matter.

Cobalt has advised Hili Properties on its EUR 20 million acquisition of the holding company of the Riga shopping center. Sorainen reportedly advised the seller.

“The 7,863 square meter complex on Stirnu street sits on a 21,580 square meter plot in one of the city’s most densely populated residential areas,” Cobalt informed. “The property has been in commercial operation for 15 years and features Swedish-owned supermarket giant Rimi as its anchor tenant.”

Hili Ventures subsidiary Hili Properties manages commercial real estate for lease in several European countries, including the Baltic countries.

“We are thrilled with this latest acquisition in Riga, particularly as it meets our investment strategy criteria: long-term leases, a renowned anchor tenant, and stable cash flow generation from the first day of entry into our portfolio,” Hili Properties Managing Director George Kakouras commented. “The property is a landmark in the city, and it is with great pride that we take over its management. We are looking forward to working with the tenants and building a relationship with every one of them, the visitors to the shopping center, and the local community.”

The Cobalt team included Managing Partner Dace Silava-Tomsone, Partners Edgars Lodzins and Ugis Zeltins, Counsel Andrejs Lielkalns, Senior Associates Juta Meimere, Ivo Maskalans, and Inga Tenisa, and Associate Krista Helmute.

Editor’s Note: After this article was published, Sorainen confirmed it had advised the seller, Lords LB Baltic Fund III. The firm’s team included Lithuania-based Partner Kestutis Adamonis and Senior Associate Julija Kirkiliene and Latvia-based Partners Lelde Lavina and Jorens Jaunozols and Counsel Renate Purvinska.

Former Senior Associate Jorens Jaunozols has been promoted to Partner at Sorainen. He heads the firm’s Real Estate sector group in Latvia.

Specializing in real estate and construction law, Jaunozols has been with the firm since 2014, having first joined as an Associate and being promoted to Senior Associate in 2018. As of January 2022, he also co-heads the firm’s Latvian Real Estate & Construction group. Previously, Jaunozols was a Lawyer at Ektornet, from 2012 to 2014, and worked with Notary Eduards Virko, from 2008 to 2012.

“Jorens’ career path shows that investing in the team’s and one’s own development jointly with building client relationships always pays off,” Sorainen Partner and Co-Head of the Latvian Real Estate & Construction group Lelde Lavina commented. “From teammate to co-head, Jorens has always been a partner in the thinking process, be it a complicated client matter or setting strategic pathways for the team’s development. He is currently an acting mentor for our newest colleagues, a role he has also taken in the past. I am happy to welcome him to the firm’s partnership and glad that our clients will now receive even more attention to their needs from partners.”

Cobalt has advised the Baltic Green Fund on its acquisition of a 7,000-hectare forest area from Isnaudas Forest Holding’s Latvian subsidiaries. Sorainen reportedly advised the seller. Delphi reportedly advised Baltic Green on the Swedish law-related aspects of the transaction.

According to Cobalt, the acquired forest has a total area of 7,000 hectares and is located in Latvia’s Rezekne region. The transaction also included financing from Citadele Bank, providing the Baltic Green Fund with a loan of EUR 18 million for the acquisition.

The Baltic Green Fund is a forestry investment fund managed by I Asset Management. Operating since 2019, the fund specializes in the forestry sector.

The Cobalt team included Managing Partner Dace Silava-Tomsone and Senior Associates Marija Berdova and Juta Meimere.

Ellex has successfully defended the Domina shopping mall in Riga and Valleta shopping mall in Valmiera before the Latvian Constitutional Court against a claim brought by SIA Jysk Linnen’n Furniture.

According to Ellex, the case was initiated by the owners of shopping malls, SIA Eften Domina and SIA VRPB. “The applicants had applied to the Constitutional Court separately, however, the Constitutional Court decided to combine and examine the applications in one case, together with the application of the specialized retailer SIA Jysk Linnen’n Furniture having a similar claim.”

According to the firm, “both applicants requested the Constitutional Court to examine the constitutional compliance of Paragraph 24.18 (in the wording being in force from April 7 to June 1, 2021) of the Cabinet of Ministers (CM) Regulations Epidemiological Safety Measures for Limiting the Spread of Covid-19 Infection with the first sentence of Article 91 of the Constitution of the Republic of Latvia, as well as the first and third sentences of Article 105. The first sentence of Article 91 of the constitution stipulates that all people in Latvia are equal before the law and the court, while the first and third sentences of Article 105 state that everyone has the right to property and property rights may be restricted only in accordance with the law.”

According to Ellex, “the contested regulations of the CM imposed significant trade restrictions in shopping malls with a total sales area of more than 7,000 square meters. Namely, all types of shops were prohibited in large shopping malls, except only certain shops mentioned in the regulations, which provided the opportunity to purchase basic necessities. At the same time, the contested regulations of the CM did not prohibit the operation of other, similar or larger stores outside shopping malls. Thus, the regulatory framework provided for a different treatment of merchants who operated in the same and comparable conditions according to certain criteria. The Constitutional Court found that a violation of the principle of equality enshrined in Article 91 of the Constitution had been committed and declared the contested norm of the CM regulations invalid.”

Ellex’s team was led by Senior Counsel Raivis Leimanis.

Sorainen has advised RB Rail on setting the qualification requirements for tenderers in the procurement of large track sleepers and has also defended RB Rail in a public procurement dispute before the Procurement Monitoring Bureau of Latvia.

RB Rail is “organizing a tender procedure and negotiations entitled ‘Consolidated supplies of railway sleepers (including rail fastenings and sleepers) for the construction of the Rail Baltica’ railway line,” according to Sorainen. “Rail Baltica is a unique project that requires innovative solutions for organizing public procurement. The sleepers to be installed on the Rail Baltica line require a large amount of material and must meet high safety requirements. Therefore, it was necessary for our client to set proportionate but strict qualification requirements for tenderers. The requirements covered not only previous experience in supplying sleepers but also their design and manufacture, including the fitting of rail fastenings and subsoil during the production process.”

According to the firm, “one of the potential tenderers tried to challenge the qualification requirements to the Procurement Monitoring Bureau, on the basis that they are inconsistent with the Public Procurement Law, restrictive of competition, and create unequal treatment of suppliers.” Ultimately, RB Rail “managed to explain the difference between the Rail Baltica railway line and existing railway lines in Latvia. The Procurement Monitoring Bureau upheld the contested qualification requirements.”

Rail Baltica is a railway infrastructure project set to link Finland, Estonia, Latvia, and Lithuania with Poland and the European standard gauge rail line network. Earlier, Sorainen advised RB Rail on establishing the framework for the management of the Rail Baltica cross-border railway infrastructure (as reported by CEE Legal Matters on January 11, 2019).

Sorainen’s team included Counsel Raivo Raudzeps.

Sorainen has advised Helve on the drafting of the service agreement for an accelerator program in Latvia.

According to Sorainen, Helve is a service provider of management consulting, communication, and digital leadership in the field of innovation and technology.

According to the firm, “the accelerator program is organized for start-ups, to give them an opportunity to work on current sustainability challenges with market-leading companies. The aim of the program is to promote co-operation between market-leading companies and to ensure the sustainable development of innovation throughout industries.”

Sorainen’s team included Partner Ieva Andersone and Assistant Lawyer Lucija Strauta.

The promise of a return to normal, considerable public debt, a controversial WWII compensation ruling, AML-linked blockages, and a potential real estate bubble are the main discussion topics among lawyers in Latvia according to Reihmanis & Partners Partner Karlis Reihmanis.

“This autumn, the general parliamentary elections in the country will take place, and this starts to be the main talk when it comes to politics in Latvia,” Reihmanis begins. He says that the government has its hands full with combating the pandemic, still, but reports that March might see some of the governmental restrictions being lifted with the potential for this to “return things to normal life once again.”

“The government invested a lot of money in supporting the most heavily-impacted industries by handing out low-interest loans,” Reihmanis says. “Because these were loans, an increase in state debt has occurred and there is a lot of debate now about if this will impact the economy in a significant way, in the long term, even with the state budget still being healthy as tax revenue exceeded expectations,” he reports.

“A political decision which is worthy of note is the one made by the parliament in February, to award EUR 40 million in compensations to the Jewish community due to what happened during WWII,” Reihmanis says. “It has proven to be quite a controversial decision with all the political players being divided on it, as well as the overall society. There are those who view this as unnecessary because of the fact that the atrocities happened without any connection to the Latvian state – it was all the doing of the Nazi Regime,” he reports.

Legislation-wise, there is little of note to report on in terms of changes, Reihmanis says. “For quite a few years now, the main topic legislation-wise has been AML and all the procedures associated with it.” He reports that AML has been implemented in the Latvian legal framework with a heavy hand and that the system has been struggling ever since as to how to best accommodate for the change. “Many funds have been frozen by the Financial Intelligence Unit and the courts – there have been recent legal improvements made to craft a more smooth environment, but it still remains a contentious topic,” Reihmanis says.

As a last thought, Reihmanis points to some fearing a potential real estate bubble, but that it’s all “speculation at this point. Real estate has been performing admirably, with a lot of office buildings being constructed recently.” 

Walless has advised Depo DIY on the sale of the building housing its Depo outlet in Riga to the Summus Capital group through a share transaction.

The acquired property is located in Imanta, Riga, and was built in 2021 with a total area of 19,000 square meters.

Depo DIY is a do-it-yourself retailer in Latvia. Established in 2013, Summus Capital is a real estate investment holding group with investments in commercial real estate in Baltic countries.

“Depo, as the newest store in Riga and a part of the leading DIY chain in the Baltics, fits well into our diversified portfolio,” Summus Capital Management Board Member Hannes Pihl commented. “We have been preparing for this transaction for a long time. During this time, we confirmed one more time that the strategy chosen by Depo is a good basis for a long-term lease. We also want to increase the share of DIY in the rental turnover of the portfolio in the future.”

The Walless team included Partner Zane Eglite-Fogele.

Walless did not respond to our inquiry on the matter.