Category: Lithuania

Walless has advised the Lithuanian Ministry of Energy and UAB Energy Cells on state aid clearance procedures regarding a EUR 100 million investment in energy storage facilities.

The investment has been approved by the European Commission for the construction of four electricity storage facilities by the end of 2022.

According to Walless, “one of the largest projects of such kind in Europe, the facilities will contribute to Lithuania’s synchronization with the continental European network and ensure the security and stability of Lithuania’s electricity network.”

The Walless team included Associate Partner Darius Miniotas.

TGS Baltic has advised Lithuanian sports clothing manufacturer Audimas on separating its manufacturing and trading companies and on establishing a real estate management company.

According to TGS Baltic, operations will be conducted by Audimas Supply for the outsourced business, Audimas Brand for the brand business, and Audimo Turtas for real estate. Audimas will retain the holding company’s financial, information systems, human resources, asset management, and other activities.

Founded in 1997, the Audimas activewear brand operates retail chain stores in Lithuania as well as an e-commerce shop. The company exports its products into Europe, the Middle East, and has a wholesale network in Lithuania.

The TGS Baltic team included Partners Agnius Pilipavicius, Aurimas Pauliukevicius, and Ieva Povilaitiene, Associates Indre Mazeikaite, Rimante Varapnicke, and Elvinas Kizys, and Tax Consultant Loreta Antanaitiene.

Cobalt has advised Lithuanian financial technology start-up Kevin on raising USD 10 million in a seed funding round, co-lead by Global PayTech Ventures, OTB Ventures, and Speedinvest. TGS Baltic advised OTB Ventures and Speedinvest. Sorainen advised Global PayTech Ventures.

Other companies joining the funding round included Fintech Growth Fund Europe, OpenOcean, and individuals, including AmRest founder Henry McGovern.

“The new investment received in the seed funding round will be used for further product development, including point of sale (POS) payments, and expansion to new markets,” according to Sorainen. “Next year, the start-up expects to serve clients in 28 countries, including the United Kingdom, Spain, and France.”

Kevin focuses on mobile payments and POS payments. The start-up offers a B2B payment solution, which allows corporate customers to make direct transactions from their bank account to corporate bank accounts. The company operates in 15 countries, including Sweden, Finland, Norway, Poland, and Portugal.

“Seamless customer experience is at the heart of every payment,” commented Kevin CEO Tadas Tamosiunas. “We are seeing huge demand for our services, with customers now seeing up to 40% of transactions being made directly through pre-linked bank accounts in mobile apps and more than 70% switching from cards to A2A in online payments. I am grateful to our growing team of software developers who continue to build the product that enables our clients to make the world of payments faster and safer.”

The Cobalt team was led by Partner Akvile Bosaite.

TGS Baltic team included Partner Aurimas Pauliukevicius and Associate Julija Eymirlioglu.

The Sorainen team included Partner Mantas Petkevicius and Counsel Jonas Kiauleikis.

Sorainen has advised French asset manager Eiffel Investment Group on its EUR 20 million funding to renewable energy company Green Genius.

According to Sorainen, the funds will be used to complete the development of solar power plants in Italy and Spain.

Lithuanian Modus Group company Green Genius implements energy projects in Lithuania, Poland, Spain, Italy, and Romania. The company’s total capacity is expected to reach 1.5 gigawatts by 2025.

“This financing granted by vehicles managed by Eiffel Investment Group contributes to pre-construction investments when normal long-term financing is not available,” Eiffel Investment Group Managing Director Pierre-Antoine Machelon commented. “The portfolio consists of diversified projects that have reached the later stages of development, where there is no risk that the project will not be implemented.”

The Sorainen team included Partner Augustas Klezys and Counsel Lina Ragainyte-Mezene.

Although Lithuania cannot boast rich oil resources lying beneath its territory, a number of large oil industry facilities are successfully operating in the country. This suggests that Lithuania has sufficient technical capacity to import oil and petroleum products from various countries, as well as diverse and technically ensured possibilities of supplying petroleum products. Moreover, the country has secured the required amount of petroleum product state reserves, which affords protection against disruptions in their supply.

Based on the legal framework applicable in Lithuania, the oil sector operates under market conditions: there are no legal restrictions on the transport of fuel from EU Member States or import of fuel from third countries; the prices are not state-regulated (except for liquefied petroleum gas supplied to group facilities) aside from excise tariffs and value-added tax; mandatory quality indicators are set for relevant petroleum products; and no transport or import quotas have been fixed.

Despite these oil supply and refinery facilities and business-friendly regulation of trade in petroleum products, seeing the trends in the transport system and global changes, Lithuania is gradually switching to consumption of less polluting fuels and electricity, flexibly and efficiently combining the existing infrastructure of the petroleum sector with the local potential offered by renewable energy resources.

As regards the gas sector, the situation on infrastructure capacity and regulatory framework is like that in the oil sector. At the end of 2014, with the construction of the liquefied natural gas terminal in Klaipeda, the implementation of the provisions of the EU Third Energy Package, and the construction of the second line of the Klaipeda–Kursenai gas pipeline in 2015 the situation in the natural gas market substantially improved. Lithuania gained access to natural gas on international markets, the monopoly of eastern market players in this field was abolished, and competition was created. Lithuania became self-sufficient in natural gas supply (and able to supply significant quantities to countries in the Baltic region) through the liquefied natural gas terminal alone, in case of disruption of supply from Russia, or a lack of competition in supply.

However, despite this positive progress in the development of infrastructure, the Lithuanian natural gas market remains isolated from the EU’s single market for natural gas. This problem will soon be resolved by the Gas Interconnection Poland-Lithuania project, which is approaching its final stages. This project will allow Lithuania to become an important gas transit and trading hub for the Baltic States and Finland.

It can be anticipated that additional revenue generated from the transmission of natural gas and regasification of liquefied natural gas will reduce the share of costs for the maintenance of the liquefied natural gas terminal and the natural gas transmission infrastructure to Lithuanian consumers. This has never been more relevant for Lithuanian consumers as, due to the increase in gas prices in the raw materials markets, a very sharp rise in the price of gas has been observed in Lithuania. In July, for instance, the price of natural gas for household consumers increased by 26 to 46 percent.

In relation to both gas and oil, it needs to be recognized and understood that, although today our economy heavily relies on these types of energy, these all are already past technologies, and, in our view, we will be seeing a decline in their popularity over time. As mentioned above, the Green Deal initiative in Lithuania and Europe has already led regulators and market participants to focus on the development of clean and green technologies. One of these is pure hydrogen technology. Notably, this technology and its market are in the development phase, so the market and regulators should already start preparing for the application of these technologies. Hopefully, the actors involved in the development, both national and EU institutions, as well as the market participants, will have a unified approach and coordinate their actions to create an environment conducive to the realization of the potential of new technologies, covering both investment and harmonious legal regulation, for the creation of an efficient market, research, and innovation.

By Simona Oliskeviciute-Ciceniene, Partner, and Ignas Jurkynas, Senior Associate, Cobalt Lithuania

This Article was originally published in Issue 8.8 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Sorainen has advised Lithuanian venture capital fund Open Circle Capital on investing in the Billo community marketing platform.

Billo raised EUR 2 million in the seed funding round. According to Sorainen, “among other investors in the company in this round was venture capital fund Practica Capital, as well as angel investors who have themselves developed successful startups – Mantas Mikuckas, COO at Vinted; Andrius Slimas and Tomas Slimas, founders of Oberlo; Andrius Baranauskas, Product development director at Shopify.”

Billo connects businesses to a community of video content creators. According to the firm, “Billo, which has been operating in the US since 2020, has around 10,000 customers and expects to exceed EUR 3 million turnover this year. The new investment will be used for expansion in the US market: increasing its market share, improving the platform, and hiring new employees.”

Sorainen has already advised Open Circle on its previous investment in Billo’s pre-seed round, last year (as reported by CEE Legal Matters on June 8, 2020).

Sorainen’s team included Partner Mantas Petkevicius and Senior Associate Mindaugas Baniulis.

The firm did not reply to our inquiry on the matter.

Editor’s Note: After this article was published, CEE Legal Matters learned that Cobalt advised Practica Capital on co-leading the EUR 2 million seed round. The firm’s team included Partners Akvile Bosaite and Eva Suduiko.

Sorainen has advised Lords LB Baltic Fund III on the sale of a shopping center in Marijampole, Lithuania, to Rivona. Triniti Jurex advised the buyer.

The financial details of the deal were not disclosed.

According to Sorainen, this represents the first site from the fund’s portfolio to be sold in Lithuania. The shopping center has been operating since 2006, with Lords LB Baltic Fund III having acquired it in 2013. The total area of the shopping center is 7,000 square meters, and its parking area can accommodate 196 cars.

“This is the first portfolio site sold in Lithuania, where the activities of supermarkets are subject to stricter restrictions related to the pandemic and therefore the processes take time,” commented Efim Hiterer, Fund Manager at Lords LB Baltic Fund. “Given the current situation, investors are also cautious about the sustainability of rental income, but after many waves of restrictions, most have learned to more accurately forecast possible development scenarios, which helps with completing negotiations that take months or even years.”

The Sorainen team consisted of Partner Kestutis Adamonis, Senior Associates Indre Peledaite and Julija Kirkiliene, and Associate Simonas Slitas.

The Triniti Jurex team consisted of Partner Deivis Valiulis, Associate Partner Giedre Ciuladiene, and Senior Associates Violeta Kavaliauskaite-Khalil, Jaroslav Simarev, and Raminta Vilcinskaite.

Ellex has advised investment fund manager BLF Management on its establishment and licensing in Lithuania.

BLF Management is a management company focused on financing legal disputes using the investment fund model. According to Ellex, “BLF Management will specialize in the management of an investment fund that invests exclusively in legal disputes (litigation and arbitration) in the Baltic states and Eastern and Central Europe. BLF Management, the manager of the new Baltic Litigation Fund, is the first company of its kind in Eastern European countries and just the second in the whole of Europe which has received a license from a national regulator for this type of activity.”

According to the firm, “the Financial Market Supervision Service of the Bank of Lithuania, following a request from the management company BLF Management, approved the rules of the Baltic Litigation Fund – a closed-end investment fund for informed investors established by this company. This step marks the official launch of the fund’s activities.”

Ellex’s team included Partner Ieva Dosinaite, Senior Associate Gyte Maleckaite, and Associate Domantas Gudonis.

Sorainen has advised Lords LB Baltic Green Fund V on the acquisition of a Holiday Inn hotel in Vilnius from Valmeda.

According to the firm, the hotel has an area of more than 7,000 square meters located on Seimyniskiu Street, close to Vilnius Old Town.

“We are glad that the site purchased is in this exclusive area of the city,” commented Lords LB Baltic Green Fund V Fund Manager Marius Junda. “Hotels located in the central part of the capital are easily accessible, and so they can serve not only business but also tourism clients.”

The Sorainen team was led by Partner Ausra Mudenaite and Counsel Simonas Skukauskas and included Partner Saule Dagilyte, Senior Associates Vaiva Masidlauskiene, Julius Raskauskas, Gerda Skirbutiene, and Irma Kirklyte, Associates Sandra Aleksandraviciene and Povilas Uzkuraitis, and Assistant lawyer Lukrecija Urneviciite.

SPC Legal has advised Mano Sala, Grinvest, and We Property NL on the sale of a warehouse and distribution center to East Capital. Walless advised East Capital on the deal.

According to Walless, “the center is fully leased to regional e-commerce leader Pigu (part of PHH Group) in Vilnius, Lithuania. It serves as Pigu Lithuanian office headquarters for its more than 300 employees, constitutes its largest Lithuanian physical store with a built-in ‘drive-in’ function, and provides a 3,500-square-meter warehousing facility enabling immediate delivery.”

According to SPC Legal, the transaction is East Capital’s second acquisition in Lithuania and the fourth in the Baltic States.

SPC Legal’s team was led by Partner Povilas Karlonas.

The Walless team included Partners Indre Jonaityte-Grice and Mindaugas Lukas, Senior Associates Liucija Bitinaite and Mantas Lideika, and Junior Associate Domantas Vilys.