Category: Lithuania

TGS Baltic has advised the European Investment Bank on its EUR 25 million loan agreement with Klaipeda municipal water utility company Klaipedos Vanduo in Lithuania, to support its 2023-2026 investment program.

According to the firm, the financing package includes the construction and rehabilitation of the water supply, stormwater, and sewer networks; and the extension, rehabilitation, and modernization of water supply, wastewater, and stormwater treatment plants and their connected infrastructure. It also includes the purchase of water meters, operation and maintenance equipment and machinery, and investments to improve ICT processes.

“The project aims to improve the reliability and affordability of the water supply and wastewater management services, positively affecting people living in the Klaipėda service area,” TGS Baltic announced. “The investments will also support climate adaptation, mitigation, and environmental sustainability, as they will enable Klaipedos Vanduo to generate renewable energy, reduce its energy consumption, better cope with more frequent and intense rains due to climate change, and reduce groundwater and surface water pollution.”

The TGS Baltic team included Partner Zygimantas Stankevicius, Senior Associate Sebastian Okinczyc, and Junior Associate Evelina Savickaite.

TGS Baltic did not respond to our inquiry on the matter.

Walless has advised the Ministry of the Environment of the Republic of Lithuania on the renovation project of the Lithuanian Zoo in Kaunas.

According to Walless, “the renovated Lithuanian Zoo in Kaunas now promises a better living experience for animals and unveils a modern and natural wonder for visitors […] featuring a magnificent savannah and exotarium.”

The Walless team included Partner Laura Ziferman and Associate Partners Vygintas Kuprys and Marius Dobilas.

Ellex Valiunas has advised Appsflyer on its acquisition of DevtoDev. TGS Baltic reportedly advised the sellers.

Appsflyer is a SaaS mobile marketing analytics and attribution platform.

DevtoDev is a gaming and apps data analytics start-up.

According to Ellex, “this acquisition will open new possibilities for growth and innovation for Appsflyer’s range of services worldwide.”

The Ellex team included Partner Ruta Armone, Associate Partner Azuolas Cekanavicius, Senior Associates Marijus Dingilevskis, Augustinas Macionis, and Nerijus Patlabys, and Associates Ausra Abraityte-Gedmine and Vilius Norvaisas.

Lithuania becoming a buyer’s market as well as new court decisions open the door for traditionally less used M&A deal structures according to CEE Attorneys Partner Oksana Kostogriz.

“We’re seeing a shift towards a buyer’s market, where transactions are becoming increasingly creative,” Kostogriz begins. “This includes more complex transaction financing structures: external funding through quasi-equity, mezzanine financing, postponed payments, bonds, different combinations of the aforementioned, and using target assets to secure the financing on top.” Interestingly, she says, “sellers, who were previously hesitant about such arrangements, are now more open to these creative solutions. Additionally, sellers are more open to considering earnouts.”

According to Kostogriz, this opens “opportunities for market consolidators who might not have readily available funds but know the market well and have a clear vision of how to extract synergies, transform businesses, and increase a company’s profitability.” According to her, this trend isn’t sector-specific but rather has more to do with the very nature of the purchasers and sellers. “There’s significant movement in traditional sectors like production, infrastructure, and similar with long-standing businesses lacking growth opportunities and the owners exploring exit opportunities” she explains.

Another trend gathering traction in the market is the usage of option agreements. “We finally saw court practice accepting that an option agreement is not a preliminary agreement and that parties who concluded such an agreement can be forced to execute it, Kostogriz explains, adding:  “Previously there was no enforcement possible – one could only claim for compensation of damages. Before that parties and lawyers were quite reluctant to use options, while they are great tools for structuring transactions and incentivizing management.”

“The geopolitical situation is still creating tensions, meaning that Lithuanian businesses are looking for opportunities to diversify in other geographies,” she continues. “There’s a noticeable trend towards diversifying investments, with significant interest in countries like Poland, the Czech Republic, Romania, and other CEE countries.”

Finally, focusing on the bigger picture, Kostogriz reports that next year will be big for Lithuania because of an “election cycle that will usher in a new President and a new Parliament. Also, the European Parliament elections will be held as well.” According to her, the entire political arena will be “focused on topics that are most sensitive to the general public: taxation, pension funds, health care, and the like. Having this in mind, still, I do not expect a major impact on M&A activities, even though some potential investors might see additional uncertainties in the market,” she concludes.

Walless has advised Arginta and Atzwanger on the Vilnius sewage treatment plant renovation project worth EUR 37.1 million.

Arginta Engineering is a production company.

Atzwanger operates in the fields of environmental engineering, water technology, energy engineering, and building services.

According to Walless, the project will “make a positive impact on the environment by increasing the sewage treatment plant’s capacity by 60% and enabling the utilization of secondary raw materials as an energy source.”

The Walless team included Partner Laura Ziferman and Associate Partners Vygintas Kuprys and Marius Dobilas.

On November 3, 2023, Cobalt announced that Ignitis Renewables’ acquisition of a wind farm in Kelme, Lithuania, from E Energija (reported by CEE Legal Matters on July 4, 2023) had closed.

According to the firm, the target asset was the largest wind farm of the E Energija group, and the transaction involved the sale of shares in two companies developing the onshore wind park in the Kelme district.

The wind power park is already under construction and will have a capacity of up to 300 megawatts, with a planned start of electricity production in 2025. The implemented project will operate under market conditions and the related investments, including the purchase price and construction costs, should amount to about EUR 550 million.

According to Cobalt, E Energija develops and builds wind, solar, and hybrid parks in Lithuania and neighboring countries. The 69-megawatt and 9-megawatt wind power parks it has developed in the Telsiai and Kelme districts are already producing green electricity. By 2030, E Energija plans to develop up to 2000 megawatts of renewable energy projects in the region.

Ignitis Renewables is part of the Ignitis Group, an energy company operating in the Baltic States.

As previously reported, Cobalt advised E Energija while Walless advised Ignitis Renewables.

The updated Cobalt team included Partners Elijus Burgis, Paulius Markovas, and Vydmantas Grigoravicius and Senior Associate Zygintas Voronavicius.

The Walless team included Partners Povilas Zukauskas and Vaidotas Puklevicius, Associate Partners Sarunas Basijokas and Vygintas Kuprys, Senior Associates Simona Miliauskaite-Gintute and Tomas Paulauskas, and Associates Ieva Pikaite, Monika Bucinskaite, and Indre Jocyte.

Taylor Wessing has advised Lithuania’s Vinted Go on its acquisition of Dutch logistics company Homerr.

Vinted Go was launched in 2022 as the logistics arm of the Vinted Group. Vinted is a European second-hand clothing company founded in Vilnius in 2008.

“We’re excited to join forces with Homerr to further grow PUDO-based shipping in Europe, as a more cost-efficient method of delivery that also has a lower climate impact than in-home delivery,” Vinted Go announced.

“The acquisition of Dutch delivery scale-up Homerr will enable both organizations to deepen their customer-to-customer delivery expertise, through shared learning and increased scale,” Taylor Wessing Partner Maja Bole commented.

Back in 2021, Taylor Wessing also advised Vinted on its EUR 250 million financing round (as reported by CEE Legal Matters on May 17, 2022).

The Taylor Wessing Amsterdam-based team was led by Bole.

Taylor Wessing did not respond to our inquiry on the matter.

TGS Baltic has advised Lithuanian cyber security tech unicorn Nord Security on attracting a USD 100 million investment from US private equity group Warburg Pincus. Sorainen reportedly worked with Kirkland & Ellis and De Brauw Blackstone Westbroek to advise Warburg Pincus.

According to TGS Baltic, the investment saw Nord Security’s valuation almost double in one year, from USD 1.6 billion to USD 3 billion, “making it one of the biggest deals in the tech sector this year. Lithuanian company Nord Security is one of the world’s largest virtual private network (VPN) providers.” It helps users to ensure their safety on the internet. The company also provides other services like password management and file sharing.

“Compared to other technology companies, whose value has decreased over the past year as venture capital markets have slowed, Nord Security is an outlier that increased its financing and value. Additional investment created stronger financial influence for the company and new opportunities to strengthen its market position, improve and expand its product offers, and acquire other companies,” TGS Baltic reported.

“We will continue to address the needs of our users by bringing market-leading innovative features, informative marketing, and a holistic approach towards consumer and business cybersecurity needs,” Nord Security Co-CEO and Co-Founder Tom Okman commented. “The new financing round and our investors’ experience and know-how allow us to be in an even stronger position to make the Nord name synonymous with online privacy and security.”

The TGS Baltic team included Partner Marius Matonis and Senior Associate Paulius Dabulskis.

Noor and the Lithuanian Red Cross Society have executed a memorandum of cooperation based upon which Noor will provide continuous legal advisory and assistance to the Red Cross on various legal matters.

The Lithuanian Red Cross Society is a state-run humanitarian aid agency, which aims to protect human life and dignity, alleviate human suffering and provide assistance to people in need in Lithuania and abroad. The main areas of the organization’s activities are caring for lonely seniors, assistance to people with disabilities and their families, first aid training, humanitarian aid to vulnerable people in Lithuania, and assistance to refugees, asylum seekers, and migrants. 

“The last few years have been challenging for the Lithuanian Red Cross, and the country as a whole, as we have overcome several crises and have grown stronger and bigger as an organization,” LRC Society Head Kristina Meide said. “We are now more active than ever with new activities, strengthening our programs, and wanting to help even more people. However, almost all humanitarian organizations face legal obstacles and regulatory challenges in their operations. This can also lead to delays in aid. While we are grateful to Noor’s legal professionals for their support and legal advice, we welcome the partnership established by this memorandum of understanding and the opportunity to now focus more effectively on our organization’s core objectives and mission.”

Organizations like the Red Cross are “not only required to be transparent and report to the public but also to actively respond to changes in the world,” Noor Managing Partner Giedrius Murauskas added. “The unstable situation in our region, government decisions, and new procedures often mean a lot of legal issues that are not always easy to resolve.  Among other things, such organizations are expected to be active in the legislative field.”

TGS Baltic has successfully represented Orlen Lietuva, Philip Morris Lietuva, and Lietuvos Pastas in a dispute regarding the lawfulness of an out-of-court bankruptcy process for Inter Rao Lietuva.

Orlen Lietuva is a subsidiary of the Polish PKN Orlen and it owns the Mazeikiai oil refinery as well as an oil-processing plant in Lithuania. It is the only oil refinery in the Baltic States. Philip Morris Lietuva is Philip Morris International’s affiliate in Lithuania. Lietuvos Pastas is the Lithuanian postal service. Inter Rao Lietuva is involved in the wholesale and retail trade of electricity in Lithuania.

According to TGS Baltic, “the Court of Appeal of Lithuania held that the bankruptcy process of Inter Rao Lietuva had been started unlawfully” without informing Orlen Lietuva, Philip Morris Lietuva, and Lietuvos Pastas as interested parties. According to the firm, failure to properly inform the companies “deprived them of a possibility to object to the application of the out-of-court bankruptcy procedure, appointment of the insolvency administrator, eliminated the possibility to present their arguments and evidence regarding the insolvency of the company, a possibility to initiate a judicial dispute that would actually prevent the start of such a bankruptcy procedure.”

As TGS Baltic explains, “the court noted that the essence of bankruptcy carried out in an out-of-court manner is an amicable process where the company and all its creditors reach a common agreement. Therefore, a company seeking bankruptcy must treat each person who potentially can make claims against it for the fulfillment of the company’s obligations, irrespective of the amount of the financial claims, as its creditor and must inform all creditors about its intention to start a bankruptcy process: both those the claims of which it accepts and those that it does not.”

Ultimately, the decision to start the process of out-of-court bankruptcy of Inter Rao Lietuva was canceled.

The TGS Baltic team included Attorneys at Law Dovile Armalyte, Ramunas Kontrauskas, and Marius Brasiunas and Associate Attorney at Law Lukas Radzevicius.