Category: Latvia

Cobalt has advised Latvian construction equipment rental company Storent Holdings on a new bond issuance, which raised EUR 8.7 million for notes with a 10% interest rate.

“This issuance once again attracted strong investor interest, with total demand exceeding the issue size by 24%, and subscription orders being received from 1445 investors in Estonia, Latvia, and Lithuania,” Cobalt announced.

“This is already the second Storent bond issue in a row when investor demand has exceeded the number of bonds offered,” Storent Group Co-founder and Chairman of the Board Andris Pavlovs commented. “Close to 3,000 private investors have shown their trust in Storent, which is of the utmost importance to us. We decided to meet the entire oversubscribed demand, as it will enable the company to accelerate the renewal of rental equipment.”

Cobalt also advised on the first Storent Holdings bond issuance: EUR 10.5 million in 11% interest rate bonds with a December 2025 maturity (as reported by CEE Legal Matters on June 29, 2023).

The Cobalt team included Partner Edgars Lodzins, Senior Associate Krisjanis Buss, and Associate Maira Puzule.

It is a time of transformative change for the Baltic region, according to Spridzans, Snipe & Hramcenko Partner Ansis Spridzans, considering important developments like the Rail Baltica project connecting Tallinn, Riga, and Vilnius in the Baltic states with Central Europe, the growth of fintech and cutting-edge finance, and the impact of ESG on the Latvian banking and finance sector.

“Rail Baltica is a headline project in the Baltic region, aiming to connect Tallinn or even Helsinki to Warsaw,” Spridzans begins. “Its construction phase is significantly affecting various industries, including legal, due to extensive land disputes, procurement, employment, and many other issues.” As he describes it, “it is a transformative time for the region, presenting both challenges and opportunities in the legal area.”

Focusing on the baking and finance sector, Spridzans reports it is “at a pivotal juncture, especially with the new Environmental, Social, and Governance regulations becoming increasingly prevalent.” According to him, “the Central Bank of Latvia is using its influence, albeit softly, to push the industry towards these standards. This shift towards ESG, away from the previous focus on money laundering, signifies a major change in priorities.” On this account, he says he expects next year to be particularly active as the importance of ESG continues to rise.

Furthermore, Spridzans highlights there is a “noticeable spike in the activity of licensing non-banking institutions, including electronic money platforms, crowdfunding, and peer-to-peer platforms. This growth can be attributed to the Latvian regulator’s special competence and the experienced local workforce, positioning Latvia as a hub for such financial innovations,” he explains.

Taking aim at the wider fintech start-up scene in Latvia, as well as the Baltic countries overall, Spridzans reports it is “thriving, thanks to new investments and an increasing number of ventures. My involvement with the Latvian Business Angels Association has allowed me to witness the strong growth in startups firsthand – this surge in interest, even among people who are not high-net-worth individuals, in supporting new ideas is fostering a dynamic entrepreneurial ecosystem,” he shares.

Finally, Spridzans shares an observation: “The current geopolitical situation has significantly strengthened business ties between Latvia and Ukraine. We’re seeing an influx of Ukrainian businesses relocating to the Baltic states, along with an increase in Ukrainian products in our markets – and vice versa. The establishment of companies, which was less common a few years ago, is now happening at a rapid pace, highlighting a fast-evolving cross-border business landscape,” he concludes.

Cobalt has advised Latvian national carrier AirBaltic on its agreement with UPB Nams for the construction of the Baltic Cargo Hub at the Riga Airport, as well as on the related agreements with Riga Airport and design and construction agreements.

According to the firm, “this state-of-the-art facility is set to become the largest dedicated air cargo handling center in the Baltics, allowing the handling of up to 45,000 tons of cargo annually, solidifying Riga Airport’s position as a leading air cargo hub. The facility will feature direct access to the apron, making cargo import, export, and transit processes quick and easy.”

Spanning an area of 6,895 square meters, the hub will dedicate approximately 5,000 square meters to cargo handling facilities and around 2,000 square meters to office spaces and focuses on sustainability, aiming for a BREEAM certification. Project development is estimated at 12 months.

“The new Baltic Cargo Hub will be equipped with cutting-edge, semi-automatic cargo handling equipment – Material Handling System, including a mail sorter. These advancements will significantly improve handling efficiency for both belly cargo and dedicated cargo freighter aircraft. The hub is designed to have full special cargo handling capabilities with dedicated temperature-controlled rooms for pharmaceuticals and perishables, and premises for dangerous goods, live animals, and valuable shipments,” Cobalt reported.

AirBaltic operates more than 100 routes from Riga, Tallinn, Vilnius, and Tampere, offering connections to a wide range of destinations in the airline’s route network in Europe, the Middle East, North Africa, and the Caucasus region.

The Cobalt team was led by Managing Partner Dace Silava-Tomsone.

Former Senior Associate Zane Sedlova has been promoted to an Associate Partner position at TGS Baltic in Latvia.

According to TGS Baltic, in addition to Sedlova’s practice in the Litigation practice group, her area of responsibility will include the training of junior lawyers and legal assistants. Sedlova has been with TGS Baltic since 2022. Before that, she spent almost 11 years with Romualds Vonsovics.

“This news of growth in our lawyers’ team strengthens our professionalism and ability to offer clients efficient and business-oriented legal advice, as well as brings the law firm closer to reaching new and ambitious goals,” TGS Baltic Latvia Managing Partner Ivars Grunte commented.

TGS Baltic has advised Darda on its EUR 1.3 million sale of a 3,777-square-meter plot in the center of Riga to Satekles Business Center 2 for the development of a new office complex. Sorainen reportedly advised the buyer.

The target plot is adjacent to the railway station and Rail Baltica infrastructure and “Satekles Business Center 2 plans to develop a new office complex in this prime location to align with the city’s evolving urban landscape,” the firm reported.

Satekles Business Center 2 was previously known as Linstow Tobre. Linstow has an active ownership role in several major development projects including offices, health properties, shopping centers, hotels, leisure, and parking properties. Linstow Baltic’s parent company, Linstow AS, is wholly owned by Norwegian Awilhelmsen AS.

The TGS Baltic team was led by Senior Associate Armands Masulis.

TGS Baltic has advised Lielais Lauks on the EUR 460,000 sale of a 3.19-hectare land plot in Adazi, Latvia, to Kinetics Nail Systems, which plans to construct a new factory.

Kinetics Nail Systems is a Latvian manufacturer of professional nail care and skin care products, with over 20 years of experience and partners in more than 40 countries.

According to TGS Baltic, “the transaction represents a substantial financial investment and regional expansion and growth plans of Kinetics Nail Systems. Establishing a new factory is anticipated to positively impact the local economy, create job opportunities, and foster industrial development. The latest methods will be used in the Kinetics Nail Systems production facility, having a minimum impact on environmental pollution.”

The TGS Baltic team was led by Senior Associate Armands Masulis.

Former Ellex Partner Andris Lazdins and former PwC Legal Head of Corporate and M&A Janis Gavars have joined forces to open a new law firm: Lazdins Gavars.

The new firm will primarily focus on venture capital and start-up-related work in the areas of transaction support, dispute resolution, and compliance strategies.

Before setting up the new firm, Lazdins spent almost 11 years with Ellex, the last year and a half of which as a Partner. Before that, he spent almost three years with Aldis Gobzems and, earlier, a year and a half with Egils Radzins.

Before joining forces with Lazdins, Gavras spent almost seven years with PwC, two years of which he was PwC Legal’s Head of Corporate and M&A. Before that, he spent two years with Ellex and, earlier, two and a half years with Lawin.

“We are pleased to combine the experience gained in providing legal assistance to clients on an international scale,” said Lazdins. “By complementing each other’s strengths, we are proud to provide our clients with a wide range of services and personalized assistance. We are ready to stand by our clients in their success – by understanding their business, we will offer solutions that will go hand in hand with the clients’ growth and goals.”

“We are a law firm for ambitious, growing, and striving companies,” Gavars added. “In our work, we will remain a reliable and loyal partner to our clients, not afraid of the complex legal challenges that make our work so exciting.”

Cobalt has advised Baltic real estate developer Capital Mill on the sale of its 3.3-hectare industrial property located at Granita Iela 17, in Riga, to Proks Capital in a share transaction.

The total area of the developed industrial park is 10,567 square meters. The sole tenant of the property is Antalis, a European distributor of paper, packaging, and visual communication solutions owned by the Japanese Kokusai Pulp & Paper Group.

According to Cobalt, “this is one of the largest industrial property transactions in Latvia in 2023, both by area and by value.”

The Cobalt team included Managing Partner Dace Silava-Tomsone, Senior Associate Diana Zepa, and Associate Vadims Zvicevics.

Cobalt has advised the ERB Rail JV consortium – formed by France’s Eiffage Genie Civil, Poland’s Budimex, and Italy’s Rizzani de Eccher – on the public procurement process and the EUR 3.7 billion contract for the construction of the Rail Baltica mainline in Latvia with SIA Eiropas Dzelzcela Linijas.

The construction works for the Rail Baltica mainline will involve railway substructures, embankments, road crossings, and railway superstructures, including track and other related infrastructure, over approximately 230 kilometers, Cobalt reported. The value of the FIDIC framework contract awarded in the public procurement procedure is EUR 3.7 billion.

Eiffage is a European civil engineering and public construction company with more than 30 years of experience in large-scale infrastructure projects, including the implementation of the Eurotunnel and the Montpellier-Perpignan high-speed rail lines.

Budimex is a construction group operating in Poland and providing services in the infrastructure sector.

Rizzani is an Italian general contractor, active in the areas of engineering, infrastructure, and building construction.

The Cobalt team included Managing Partner Dace Silava-Tomsone, Partners Gatis Flinters, Sandija Novicka, Toms Sulmanis, and Ugis Zeltins, Specialist Counsel Sergejs Rudans, Senior Associate Marija Berdova, Associates Arturs Valdersteins, Krista Helmute, Toms Dreika, and Gabriela Santare, and Junior Associate Jurijs Georgs Rusakovs.

TGS Baltic has advised iCotton on its EUR 20 million issuance of secured bonds in collaboration with the Signet Bank. Deloitte Legal reportedly advised iCotton as well.

iCotton is a Baltics hygiene products manufacturer.

According to TGS Baltic, “the bonds, offered in a private placement, are anticipated to be listed on the Nasdaq Riga First North alternative market in the near future. The proceeds from this bond issue will be utilized by the iCotton Group to refinance its bank liabilities in Latvia and Poland. The refinancing of bank loans that have amortization schedules with bonds, that are repayable at maturity, enables the group to obtain additional working capital financing to further expand its business without increasing its total liabilities.”

Back in 2021, TGS Baltic advised on Altum’s EUR 10 million loan to iCotton (as reported by CEE Legal Matters on November 8, 2021).

The TGS Baltic team included Partner Inese Hazenfusa and Associate Martins Galzons.