Category: Lithuania

TGS Baltic has advised InMedica and its shareholders INVL Baltic Sea Growth Fund and Litgaja on the merger with the MediCA Group. Cobalt advised MediCA.

“Post-transaction, one of the largest Baltic private equity funds INVL Baltic Sea Growth Fund (through its special purpose vehicle ‘BSGF Sanus’) remains the largest shareholder, with an ownership stake of 45% of InMedica shares, 40% is owned by the largest Latvian private medicine group Repharm, and the remaining 15% is held by Lithuanian company Litgaja,” Cobalt informed.

Invalda INVL group company INVL Baltic Sea Growth Fund is a Baltic private equity fund. The group’s companies manage pension and mutual funds, alternative investments, individual portfolios, private equity assets, and other financial instruments.

InMedica and the MediCA Group are private medical chains operating in Lithuania.

The TGS Baltic team included Executive Partner Marius Matonis, Partners Aurimas Pauliukevicius and Dalia Tamasauskaite-Ziliene, Senior Associate Julija Eymirlioglu, and Associates Paulius Dabulskis, Rimante Varapnicke, Auguste Linauskaite, and Edvinas Einoris.

The Cobalt team included Partners Elijus Burgis and Rasa Zasciurinskaite and Senior Associates Julija Aleska and Laura Ryzgelyte.

Walless has advised the Vilnius City Municipality on the National Stadium tender procedure, concession agreement, related procurement disputes, and on clearing the state aid scheme for the project with the European Commission.

“The Multifunctional Complex in Vilnius concession project is the most complex and the largest public-private partnership project being implemented in Lithuania ever,” Walless informed. “It took more than five years from the issuance of the tender conditions until the signing of the contract.”

According to the firm, “the European Commission found this project to be complex and required significant input to get acquainted with it. But, after receiving detailed clarifications and substantiations, a green light to continue this project was given.”

The Walless team consisted of Managing Partner Dovile Burgiene, Partners Laura Ziferman and Darius Miniotas, and Associate Partner Marius Dobilas.

TGS Baltic has successfully represented ten former Ryanair employees in an unlawful dismissal dispute before a Lithuanian court of first instance.

“Ten former employees of Ryanair were unlawfully dismissed,” the firm informed. “The employer, in the course of transfer of a part of the business, did not offer the employees the same employment conditions with the new employer (the business assignee) but decided to dismiss the employees due to excessive work functions. Employees, as flight attendants, were not given extended annual leave while working for Ryanair, either.”

According to TGS Baltic, the proceedings lasted for almost two years and covered aspects of interpretation of the law in four jurisdictions, including Lithuania, Poland, Ireland, and the United Kingdom. “The court of first instance awarded over EUR 602,000 to the employees and stated that the employees had been dismissed unlawfully [and] had not been given the extended annual leave they were entitled to.”

The TGS Baltic team included Partner Ieva Povilaitiene and Associate Indre Mazeikaite.

TGS Baltic has advised Maxima Grupe on structuring its Commercial Paper Program and a EUR 35 million issuance of notes under the program.

Maxima Grupe owns retail chains Maxima in the Baltics, Stokrotka in Poland, and T-Market in Bulgaria, as well as e-grocer Barbora operating in the Baltics and Poland. It is part of the Vilniaus Prekyba group operating chains of retail stores and pharmacies as well as real estate development and property management companies in the Baltics, Sweden, Poland, and Bulgaria.

According to TGS Baltic, “the notes were subscribed by institutional investors from the Baltic states, Scandinavia, as well as the United Kingdom and other European countries. Despite volatile market conditions, investors demonstrated strong interest and support for the securities and the notes were placed at a 1,064% yield.”

A year ago TGS Baltic advised Maxima Grupe on a EUR 40 million issuance of Commercial Papers (as reported by CEE Legal Matters on March 22, 2021).

TGS Baltic’s team in Lithuania included Partner Vidmantas Drizga, Associate Partner Mantas Gofmanas, and Associate Elvinas Kizys.

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

SPC Legal has advised the Panevezys free economic zone (FEZ) on concluding an investment agreement with Arginta Engineering. Ellex advised the investor.

“Arginta Engineering is planning to build a modern, 15,000 square-meter factory in Panevezys FEZ, which will be equipped with innovative production, administrative, and household premises that meet western standards,” SPC Legal informed. “Among other things, Arginta Engineering is planning to invest about EUR 15 million in a new factory and, until 2027, create up to 300 new jobs for programmatic machine tool operators, welders, and others, both experienced manufacturing workers and motivated trainees, who would like to change the field of work.”

The Panevezys FEZ is a 47-hectare economic zone in Panevezys, Lithuania, offering businesses tax incentives and access to infrastructure, including roads, water and sewage facilities, electricity, inner roads, lighting, and natural gas pipelines.

SPC Legal previously advised the Panevezys FEZ on an investment from AQ Wiring Systems (as reported by CEE Legal Matters on November 18, 2020).

The SPC Legal team included Partner Povilas Karlonas and Associate Sandra Narmontaite.

The Ellex team was led by Senior Associate Dominykas Uzkurnys and included Partner Olga Petroseviciene and Senior Associate Gabriele Vazniokaite.

The Lithuanian government seems to be jumping from one fire to another between war-related crises, high inflation rate and fuel prices, and a lack of commodities, according to Magnusson Managing Partner Ligita Ramanauskaite.

“Nowadays, the vast majority of most discussed topics in Lithuania would be Ukraine-related political developments,” Ramanauskaite says. “On the one hand, we are very unhappy with the ongoing war and atrocities in Ukraine. Since the beginning of the war, Lithuania has been sending aid, similar to other Baltic states, which are against the war.” On the other hand, she says, “we, as lawyers, also see that Russian business is contaminated with the war, and many law firms are unwilling to provide legal help to Russian citizens.”

“Before the war, the Lithuanian government was working on tax reform aimed to restructure taxes in general, in particular, the personal income and property taxes,” she explains. “The purpose was to have a more balanced system, as the existing legislation includes a lot of exemptions. The proposed amendments offer a narrower solution, that would ensure more equality.” However, Ramanauskaite points out that “the adoption of new tax regulations has been postponed indefinitely. It feels like the government is  trying to address both, past and future crises.”

Ramanauskaite highlights that another interesting development is related to the status of refugees. “Businesses have encountered a shortage of workforce, especially in the post-pandemic period,” she says, adding: “The government has offered work authorization for refugees, which would also be beneficial for companies lacking employees. According to recent regulations, all work permit-related restrictions for Ukrainian refugees have been waived, and now they are able to register and obtain a relevant status.”

According to Ramanauskaite, “locally, the inflation rates are already having an impact on the business world and it is very likely to continue growing in the coming months. At the same time, Oil & gas prices have rocketed recently, as we had a large number of suppliers from Russia, Ukraine, and Belarus.” 

“Clients are also increasingly asking how to deal with construction projects, as contracts are hard to implement considering initially agreed prices,” Ramanauskaite says. “Another factor impeding business activities is that certain commodities, including metal, are rather unavailable recently.” According to her, “it is also unclear from a legal perspective whether contracts are breached due to force majeure, or does if the current context constitutes a hardship, and companies unable to meet contractual obligations should thus be subject to a lenient treatment.” She concludes, that M&A lawyers are figuring out how to deal with their clients’ huge uncertainty and prepare for what is to come in the future.

Sorainen has advised asset management group Invalda INVL’s subsidiary INVL Life on obtaining a license to conduct life insurance activities in Lithuania.

According to the firm, this is the first insurance license issued in Lithuania in the last 20 years. “INVL Life was established as part of the group’s acquisition of the Baltic business of Mandatum Life, a Finnish life insurance company. INVL Life has a paid-in share capital of EUR 48 million, which is the largest share capital of all life insurance companies registered in the Baltic States.”

Sorainen also advised the INVL Group on the original deal with Mandatum Life in 2021 (as reported by CEE Legal Matters on June 29, 2021).

The INVL Group will offer life insurance, unit-linked life insurance, and additional protection such as critical illness and accident insurance among its services going forward.

Sorainen’s team included Partner Tomas Kontautas, Senior Associates Agne Sovaite, Vitalija Impoleviciene, and Mindaugas Dominykas Baniulis, and Associates Simona Timbariene and Laura Matuizaite.

On December 6, 2021, CEE Legal Matters reported that Motieka & Audzevicius had successfully defended Olympic Casino Group Baltija before the Supreme Administrative Court of Lithuania. CEE In-House Matters spoke with Monika Jakume, Legal Counsel at Olympic Casino Group Baltija, to learn more about the matter.

CEEIHM: Tell us about Olympic Casino Group Baltija and its operations in Lithuania.

Jakume: UAB Olympic Casino Group Baltija is one of the oldest and biggest land-based and online gambling organizers in Lithuania operating Olympic Casinos and Olybet. The company belongs to an international group of companies of Olympic Entertainment Group, operating in multiple countries of Europe. 

CEEIHM: Motieka & Audzevicius recently represented the company in front of the Supreme Administrative Court of Lithuania. What was the matter about? 

Jakume: In 2019, the Lithuanian gambling regulator – Gaming Control Authority (GCA), concluded an investigation and decided that the company allegedly violated AML regulations, because it did not additionally identify and registered the identity of the clients and their transactions, even though the company provided evidence that all the necessary data was filled out in an electronic journal.

CEEIHM: What was the national gambling authority’s claim against Olympic Casino Group Baltija?

Jakume: The GCA argued that the electronic journal it took during an on-site inspection was only used by the company for administrative aims, not for AML requirements, and considered it to be unfit for additional identification of the clients. Therefore, the GCA imposed a EUR 495,900 fine on the company that was ultimately annulled.

CEEIHM: How did you prepare for your defense and what were your main arguments?

Jakume: Firstly, Motieka & Audzevicius was asked to carry out an internal investigation. We wanted to be sure that we are perfectly in line with all the obligations of the AML regulation. The designated team cross-examined every employee, who was related to the matter investigated by the GCA, including the AML officers and managers. Simultaneously, our internal documentation was reviewed and external expertise of security-footage of the disputed events was ordered. As a result, they provided a report that confirmed that there was no infringement of any kind and prepared a defense strategy for the case.

As the law does not regulate precisely how entities must additionally verify client’s identity and register, the company argued that it uses an electronic journal where all information about certain clients and their transactions is registered. The fact that the journal was electronic and not paper-based did not change the fact that registration was done properly.

During court proceedings, several hearings took place, and representatives of the company – gambling operations and security professionals working for the company for several years – presented their testimony and precise explanations of the process. The company argued that it registers all the transactions of every client in an electronic journal. It was clear that the company follows AML requirements even more strictly than the law prescribes.

The Vilnius regional administrative court and the Supreme Administrative Court of Lithuania both supported the company’s arguments and ruled in its favor. The courts stated that the Company identified and registered the identity of the clients and their transactions as it is prescribed by Art. 9(1) and 9(9) of the Law on ML/TF Prevention of Lithuanian Republic (LMLTFP). The law does not regulate precisely how entities must additionally verify client’s identity, therefore the courts agreed that the company did everything right, and in particular, that the fact that the company used the journal for its internal administrative aims does not preclude it from using the same journal towards the aims of Article 9 of the LMLTFP (the GCA argued otherwise).

CEEIHM: Why did you pick Motieka & Audzevicius to represent you on this matter?

Jakume: Motieka & Audzevicius is a well-known and respected law firm in Lithuania. They are known for their experience in regulatory affairs and dispute resolution, that is why the company asked them to represent them in the case. Audzevicius proves to be persistent and has systematic and business-oriented thinking. The team quickly understood our business processes and identified how they correspond with the legislation. We continue to work with Motieka & Audzevicius because they always find an effective solution that not only satisfies regulations but is also smart business-wise.

Originally reported by CEE In-House Matters.

Former Revolut Regulatory Compliance Manager Evelina Agota Vitkute has returned to private practice and joined Adon Legal as a Partner.

Specializing in regulatory matters, Vitkute has over 14 years of experience in the legal field. Before joining the firm, she was a Regulatory Compliance Manager at Revolut, between 2021 and 2022, and a Compliance Officer at Swedbank, from 2020 to 2021. She also spent over eight years at PwC Legal, first as a Senior Legal Consultant, from 2012 to 2014, and later as an Attorney-at-Law, from 2014 to 2020. Between 2008 and 2012 Vitkute was an Attorney-at-Law with TGS Baltic.

“Banking law, as well as the finance and fintech law sector, has been humming for the last few years,” Adon Legal Managing Partner Donatas Sliora commented. “With tighter compliance regulations, more intense supervision of the Bank of Lithuania, and growing popularity of financial services provided via mobile apps and hybrid services, the demand for this kind of legal services has been growing approximately by 20% annually. We are very excited to welcome a team member with a phenomenal set of skills. Having experience as a compliance officer in two banks offers a unique perspective on setting-up compliance systems, working on regulatory audits, and dealing with other internal issues of large regulated institutions.”

TGS Baltic has advised Green Genius on the acquisition of an 85-megawatt wind farm in Lithuania.

Green Genius is an international renewable energy company. According to TGS Baltic, the company will “directly invest over EUR 100 million in this project. Businesses operating in Lithuania will be able to purchase green energy from the new wind farm, saving them over 130,000 tonnes of carbon dioxide emissions. In addition, this project will account for around 13% of Lithuania’s current wind power portfolio.”

TGS Baltic’s team included Partners Dalia Tamasauskaite-Ziliene, Dainius Stasiulis, and Paulius Zapolskis and Senior Associates Indre Vickaite-Liatuke, Simas Paukstys, and Lukas Vaisvila.

TGS Baltic could not provide additional information on the deal.