Category: Lithuania

Sorainen has advised the INVL Baltic Sea Growth Fund on its acquisition of the Nemunas and Egles Sanatorija treatment centers in Lithuania.

The transaction remains contingent on regulatory approval.

According to Sorainen, the INVL Baltic Sea Growth Fund, with its total size of EUR 165 million, is one of the largest private equity funds in the Baltics, with the European Investment Fund acting as its anchor investor.

Nemunas is a treatment center in Birstonas, Lithuania. Egles Sanatorija is a SPA and treatment center in Lithuania that provides rehabilitation, rest, and medical services in Druskininkai and Birstonas.

According to Sorainen, “in terms of short-term plans, it is planned to invest in the renovation and repurpose the buildings. Not only will this increase the energy efficiency of the buildings, but it will also help to offer a number of new, innovative procedures.”

Sorainen’s team included Partners Mantas Petkevicius, Daivis Svirinas, and Asta Augutyte-Rapkeviciene, Senior Associates Laura Matuizaite and Edita Dauksiene, Associates Gabriele Raizyte, Giedre Citaviciute, and Auridas Litvinas, and Assistant Lawyer Danas Sniute.

Sorainen did not reply to our inquiry on the matter.

Sorainen, working with Freshfields Bruckhaus Deringer, has advised Capitalica Asset Management fund Capitalica Baltic Real Estate Fund I on its EUR 3 million bond issuance.

According to Sorainen, the issued two-year bonds with a 5% annual interest rate were distributed by Siauliu Bankas and will be listed on the Nasdaq Vilnius alternative market First North.

Capitalica Asset Management specializes in commercial real estate management in the Baltic States. The Capitalica Baltic Real Estate Fund I is a real estate fund licensed and supervised by the Bank of Lithuania.

“The rised funds will be used for partial redemption of our first EUR 5 million bonds issued in 2019,” Capitalica Asset Management announced. “Three years ago those funds were invested into Verde – the greenest A Class office complex in Riga. The first building will open its doors to tenants this summer, with more than 60% of the premise area leased out already.”

The Sorainen team included Senior Associate Dalia Augaite and Assistant Lawyer Andrius Pilitauskas.

Dentons and TGS Baltic have advised the Republic of Lithuania on the EUR 650 million issuance of 2.125% notes due 2032, pursuant to the country’s Euro Medium Term Note Program. Sorainen advised underwriters Barclays and BNP Paribas. Reportedly, Freshfields Bruckhaus Deringer advised the underwriters as well.

According to Dentons, “the notes, which are rated A2 by Moody’s, A+ by S&P, and A by Fitch are listed on the Luxembourg Stock Exchange. The proceeds of the notes will be used for the refinancing of indebtedness and general funding purposes of the Republic of Lithuania. This includes spending approved by the amendment to the Law on Budget 2022, in response to the impact of the Russian military invasion of Ukraine.”

Sorainen, TGS Baltic, and Dentons have also advised on the Republic of Lithuania’s earlier issuances, including a EUR 750 million Eurobond issuance in 2021 (as reported by CEE Legal Matters on September 15, 2021), a EUR 1.75 Billion Eurobond issuance in 2020 (as reported on August 5, 2020), and a EUR 650 million issuance in 2019 (as reported on June 25, 2019).

Dentons’ team included London-based Partner Nick Hayday, Senior Associate Victoria Wyer, Trainee Julian Ng, and Solicitor Apprentice Nia Powell.

Sorainen’s team included Senior Associate Dalia Augaite.

TGS Baltic’s team included Partner Vidmantas Drizga, Senior Associate Karolina Lapinskaite, and Junior Associate Kotryna Visockyte.

Ellex has advised a Lords LB Asset Management subsidiary SPV on a EUR 23 million bonds issuance.

According to Ellex, the Lords LB Asset Management subsidiary is “developing an educational and hospitality real estate complex in Vilnius center. The first part of the bond issue in the amount of EUR 5 million has been successfully issued without a prospectus under the exemption provided in the applicable EU securities law. The second part of the issue of the bonds will continue under the prospectus for the public offering of bonds EUR 18 million approved by the Bank of Lithuania on May 24, 2022, with the anticipated total bonds of EUR 23 million listing in the main bond list of Nasdaq.”

Lords LB Asset Management is an investment management services provider in Lithuania. The company manages the collective investment undertakings and includes 12 real estate funds, one private equity fund, one energy, and infrastructure fund, and two investment companies.

The Ellex team included Partners Ieva Dosinaite and Giedrius Stasevicius, Associate Partner Egle Neverbickiene, and associate Egle Radvilaite.

Sorainen has advised Eveko Investicija on a built-to-suit lease agreement for the logistics terminal in Kaunas with Itella Logistics. Ellex advised Itella Logistics.

According to Sorainen, Eveko Investicija is converting and developing a 3,100 square-meter building on a 2.7-hectare site in Kaunas. “A modern logistics terminal with administrative premises of more than 7,000 square meters is planned there. Itella’s new industrial premises will consist of 3 zones: administrative, distribution, and warehousing,” the firm informed.

Finnish Posti group company Itella Logistics is an international logistics company providing logistics and parcel delivery services. It also operates the Smartpost parcel terminal network.

“We have owned this land plot in Kaunas since 2005, and now we see excellent opportunities to use it by developing a new express parcel terminal in a very attractive location,” Eveko Investicija CEO Edmundas Padvaiskas commented. “This is a conversion project – a new logistics center will be built by reconstructing and expanding the former old garage. We plan to complete the facility in the third quarter of 2022 and lease it on the basis of a long-term lease agreement.”

The Sorainen team was led by Partner Simonas Skukauskas and included Associates Sandra Aleksandraviciene and Jurgita Mikucioniene.

The Ellex team was led by Partner Dovile Stancikaite.

Cobalt has advised Lithuanian financial technology start-up Kevin on raising USD 65 million in a Series A funding round. Sorainen advised investor Global PayTech Ventures.

According to Cobalt, “the financing round was led by Accel, with Eurazeo, and previous backers OTB Ventures, Speedinvest, OpenOcean, and Global Paytech Ventures also participating. Harry Stebbings of 20VC, Ilkka Paananen, CEO & Co-Founder of Supercell, and Amitabh Jhawar, ex-CEO of Venmo are some of the individuals also investing in the round.”

Kevin focuses on mobile payments and POS payments and offers a B2B payment solution, which allows corporate customers to make direct transactions from their bank accounts to corporate bank accounts.

“The new investment will be used to secure 35% coverage of POS payment terminals across Europe while working towards achieving over 85% by the end of 2023,” Sorainen informed.

Cobalt and Sorainen previously advised on Kevin’s seed funding round (as reported by CEE Legal Matters on November 9, 2021).

The Cobalt team included Partner Akvile Bosaite.

The Sorainen team included Partner Mantas Petkevicius, Counsel Jonas Kiauleikis, and Senior Associate Mindaugas Baniulis.

Sorainen has advised Raydiant on establishing a new office in Vilnius, Lithuania.

US-based Raydiant offers cloud-based digital signage technology to retail businesses and restaurants.

According to Sorainen, “the new office will be their second largest location after their San Francisco headquarters. Raydiant plans to onboard 70 new team members this year in their new Lithuania location, and increase that number to 130 in 2023.”

Sorainen’s team included Partners Evaldas Dudonis and Algirdas Peksys, Associate Giedre Citaviciute, and Assistant Lawyer Barbora Bernatonyte.

Motieka & Audzevicius has successfully represented Natura Furniture in a dispute against GE Power in ICC construction arbitration and Swedish arbitral award annulment proceedings.

According to Motieka & Audzevicius, Natura Furniture acquired a EUR 4 million claim against GE Power conglomerate (former Alstom Sweden). “In 2016-2018 Motieka & Audzevicius arbitration team successfully represented [Natura Furniture] in its case against GE Power (former Alstom) in ICC arbitration in Stockholm, where the tribunal awarded the client EUR 2.6 million. GE Power then filed for an annulment of the ICC award before Svea Court of Appeal, where Motieka & Audzevicius arbitration team has again successfully represented the client.”

According to the firm, “the annulment application was based on grounds related to corruption allegations and verdicts adopted in UK criminal proceedings. After examining GE Power’s appeal, in March 2022, the Swedish Supreme Court has decided not to grant leave for GE Power’s appeal and allowed enforcement of the ICC award against GE Power.”

Motieka & Audzevicius’ team included Partners Rimantas Daujotas and Ramunas Audzevicius and Counsel Denis Parchajev.

Triniti has advised logistics technology startup GoRamp on receiving a EUR 1.5 million investment.

GoRamp is a Lithuania-based logtech startup that currently operates in 18 countries. According to Triniti, “this investment is expected to double the size of GoRamp’s international team, which is expected to include IT, sales, marketing, and customer service specialists.”

Triniti’s team included Partner Giedre Ciuladiene and Associate Kamila Ratkevic.

Lithuania’s fintech market is expanding, while inflation and implementing a sanctions regime create obstacles for businesses and the general public, according to Adon Legal Managing Partner Donatas Sliora.

“Given the geopolitical context and measures implemented in Lithuania and on the EU level, the major topic in the country is adhering to the sanctions regime,” Sliora explains. “This is especially crucial to financial institutions, as there is a need to ensure that the new regime is being implemented, together with the additional limitations from the national regulator.” For example, he explains, “financial institutions have certain additional limitations on transferring money to Russian and Belarusian residents. In that context, one of the biggest obstacles for financial institutions includes reviewing existing client databases and applying new standards and rules to them.”

“Lithuania remains the hot spot for fintech companies,” Sliora notes. “We still have a significant concentration of companies operating in the payments market, an increasing number of specialized banks, and other regulated financial services providers.” In addition, he says “it is likely that Lithuania will also become the hub for crowdfunding service providers seeking to register under the new EU crowdfunding services providers regulation, thus, the finance sector is still expected to grow rather rapidly.”  

Sliora explains that increased interest in Lithuania’s market is potentially also related to new regulations being implemented in neighboring countries. For example, he says, “after some other EU member states have increased the pressure on virtual asset service providers, Lithuania became popular amongst such businesses. We have a significant number of new cryptocurrency exchanges that are registered.” According to him, Lithuanian legislators might also establish new requirements for virtual asset service providers, however, “it is not expected to affect Lithuania’s popularity and deter the country’s potential in that regard.”

One of the major challenges faced by the country is a high rate of inflation, according to Sliora. “The inflation rate in Lithuania remains significantly higher than the EU average,” he says, noting that “inflation in March in Lithuania was 15.6% compared to 7.4% in Germany. This leads to Lithuanian businesses and natural persons searching for ways to avoid the depreciation of cash and look for new investment opportunities.” According to him, high inflation may also have an effect on businesses’ ability to perform long-term contracts.

Overall, Sliora points out that the market remains active, with a high number of M&A deals, especially in the IT sector, and that the real estate market is still active. “Individuals still believe that investing in real estate is a safe option for investment” he concludes.