Category: Lithuania

TGS Baltic and Dentons have advised the Ministry of Finance of the Republic of Lithuania on its EUR 750 million Eurobond issuance. Sorainen advised the lead managers Goldman Sachs and J.P. Morgan on the deal. Freshfields Bruckhaus Deringer reportedly also advised the banks.

The bonds have a 30-year maturity, bear a 0.75% annual interest, and are listed on the Luxembourg Stock Exchange. According to TGS Baltic, Lithuania had previously issued bonds of the same duration in 2017, 2019, and 2020, with annual interest rates amounting to 2.1%, 1.625%, and 0.5%, respectively.

“The interest rate risk premium above the average value of the swaps, which determines the profitability of this issue, is only 55 base points – i.e. lower than all previous issues of the same duration,” said Deputy Minister of Finance Gediminas Norkunas. “Interest rates in the market have been rising for some time, but we have taken the opportunity to lock interest rates lower than inflation.”

Last year, Sorainen, TGS Baltic, and Dentons have advised on two other Eurobond issuances by the Republic of Lithuania, raising EUR 2 billion in April (as reported by CEE Legal Matters on May 06, 2020) and EUR 1.75 billion in July (as reported on August 05, 2020).

Sorainen’s team included Partner Tomas Kontautas, Counsel Indre Sceponiene, and Senior Associates Dalia Augaite and Agne Sovaite.

The TGS Baltic team included Partners Vidmantas Drizga and Robertas Degesys, Associate Partner Mantas Gofmanas, and Senior Associates Karolina Lapinskaite and Tadas Varapnickas.

The Dentons team included Partner Nick Hayday, Senior Associate Moeen Qayum, Associate Niharika Khimji, and Trainee Ed Varney.

Motieka & Audzevicius has advised Lithuanian educational start-up Turing College on its USD 1.05 million seed-round with investments from local and foreign venture capital funds and Silicon Valley business angels. Glimstedt advised Iron Wolf Capital on its investment into Turing College.

Turing College is a data science career school operating in Europe. It is a member of the Y Combinator program, has received USD 2.57 million in funding to date, and has launched three cohorts of data science students.

According to Glimstedt, while the majority of Turing College’s students are from Lithuania, the services are also used by citizens of other countries. The investment will allow the school to continue expanding its course offer, student number, and jurisdictions targeted.

Based in Vilnius and London, Iron Wolf Capital is a seed-stage venture capital fund from the Baltics, investing in innovative products, technology, or business models.

The Motieka & Audzevicius team included Senior Associate Rokas Jankus and Associate Darius Amsiejus.

Glimstedt’s team consisted of Partner Andrius Ivanauskas and Associate Simona Butkute.

Sorainen has advised insurance aggregator Edrauda.lt founders Rima Kazlauskaite and Dainius Alkinas and investor ME Investicija on the sale of their company to online insurance group Netrisk. Cobalt advised the Netrisk Group on the deal.

According to Sorainen, the Netrisk Group is owned by private equity firm TA Associates and technology investment fund MCI EuroVentures. It operates in Lithuania, Hungary, the Czech Republic, and Slovakia. “Edrauda’s Lithuanian platform, which offers the ability to compare, select and buy services from different insurers online, joins a family of fast-growing regional insurance aggregators that includes names such as Netrisk.hu, Biztositas.hu, Klikpojisteni.cz, Porovnej24.cz, and Netfinancie.sk.”

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

Cobalt’s team included Partner Akvile Bosaite and Senior Associates Lina Aleknaite-van der Molen and Julija Aleska.

Ellex Valiunas has advised Norwegian real estate management company Baltic Sea Properties on two lease agreements with French parcel delivery group DPD in the cities of Siauliai and Telsiai.

According to the firm, the leases are intended for the development of two new parcel distribution centers in the two Lithuanian cities. The total size of the terminals will be approximately 4,000 square meters. They will be adapted for parcel delivery distribution and logistics. The buildings are planned to be built by 2022’s second quarter. Both agreements are for a 15-year triple net lease. Under the lease agreements, BSP will have to expand both terminals by at least 1,000 square meters within five years.

Last year, the firm advised BSP on its sale of 13 buildings to Rivona (as reported by CEE Legal Matters on November 27, 2020).

The Ellex Valiunas team included Associate Partner Julija Nikitaraviciene.

A firm representative said they have no information as to the advisor of DPD.

Ellex Valiunas has helped Curve in extending and expanding its electronic money institution (EMI) license from the Bank of Lithuania.

Curve is a privately held fintech company founded in 2015 in the UK. The company facilitates payment through the connection of its clients’ credit and debit cards into one card called the ‘Curve Card’.

According to the firm, the Bank of Lithuania issued the EMI license to Curve in October last year (as reported by CEE Legal Matters on November 2, 2020). It gave the company the right to issue electronic money and execute payment transactions, to provide a cash withdrawal service from a payment account, to authorize payment instruments, to provide payment initiation and account information services, and to exchange currency.

“Curve has decided to offer its customers in Europe significantly more electronic payment and other related services,” the firm said. “For this purpose, it was important for the Ellex Valiunas customer to expand the existing license and to be included in the lists of consumer credit providers and insurance intermediaries in Lithuania.”

The Ellex team consisted of Partners Ieva Dosinaite and Giedrius Stasevicius, Associate Partners Julija Slekonyte and Neringa Mickeviciute, Associate Consultant Mindaugas Moskalionas, Lawyers Domantas Gudonis and Egle Radvilaite, and Associate Lawyer Gyte Maleckaite.

On May 21, 2021, CEE Legal Matters reported that Ellex Valiunas had successfully represented Western Baltija Shipbuilding in its appeal of a public procurement award to a consortium of Finnish companies to provide a specialized vessel for the Lithuanian Armed Forces to eliminate pollution incidents and carry out rescue operations in the Baltic Sea. CEE In-House Matters spoke with Andrius Digrys, General Legal Counsel at Western Baltija Shipbuilding, to learn more about the deal.

CEEIHM: Tell us a bit about Western Baltija Shipbuilding.

Andrius: WBS is a subsidiary of the Western Shipyard Group (WSY). WSY is a part of the biggest Estonian corporation – BLRT Grupp.

The Western Shipyard Group is one of the largest marine engineering corporations in Lithuania for already five decades. Currently, the group incorporates 21 companies that specialize in different fields of activity and provides all services related to the life cycle of a ship. The main activities of the group are shipbuilding, ship repair and conversion, complex ship design and engineering solutions, large and complex metal construction and equipment production, stevedoring services.

The Western Shipyard Group is the largest employer in Western Lithuania, creating over 3,000 jobs.

Western Baltija Shipbuilding specifically is a modern shipyard offering a full range of services from conceptual design to “turn-key” projects. The main direction of Western Baltija Shipbuilding strategy is building steel blocks, hulls, and “turn-key” vessels.

The shipyard was founded on January 19, 1947. The first product: a non-propelled barge was built by 1952. Every year we register a growing production of different types of ships, mainly fishing trawlers. During the 70 years of operations, it has built over 350 ships. The shipyard has also built floating docks which have been exported around the world. Some of them are still in operation.

The next significant step in the shipyard’s development took place on April 19, 1997. The shipyard was acquired by Odense Steel Shipyard LTD (OSS) which was a part of the Danish A.P. Moller-Maersk group. During this period the shipyard started to invest in modern technologies. It registered an absolute record – it produced more than 50,000 tones of different steel blocks and ship hulls per year.

In 2010 the shipyard was acquired by BLRT Grupp. For 10 years now, Western Baltija Shipbuilding has maintained its leading position in shipbuilding in the Baltics region. 

CEEIHM: Ellex Valiunas successfully helped you challenge a public procurement award. What is the background of the case?

Andrius: Ellex Valiunas was responsible for legal support. All arguments – two of which were accepted by the court as valid and relevant – were elaborated by the WBS team led by myself.

WBS participated in the public procurement tender organized by Lithuanian Armed Forces (LAF). The object of the tender was a search and rescue vessel, which also had to fulfill towing, oil/pollution-fighting, divers support, and other functions. The budget of the tender was more than EUR 39 million.

In November 2020, LAF awarded the contract to a third-party shipbuilding yard leaving WBS in second place. After a comprehensive examination of the competitor’s offer, the WBS team found at least 4 examples of non-compliance with the tender’s documentation. In other words, the competitor offered a vessel, which in the opinion of WBS, does not comply with the tender documentation requirements. These 4 examples were the arguments (factual ground) for challenging the award. In December 2020, pre-court claims of WBS were rejected by the LAF. Therefore WBS took the decision to commence legal proceedings just before the very end of 2020.

CEEIHM: What were the main arguments supporting your claim?

Andrius: WBS elaborated the following four arguments (grounds) to support our claim. Two of these arguments were accepted by the court, which proves that the competitor’s offer did not comply with the tender requirements:

1. The functionality of the vessel. The competitor’s offer did not include a possibility to have all needed functions onboard the vessel all the time (or without significant interference to the operation of the vessel). The vessel could perform only one or a few functions and to perform the remaining ones, re-installation of respective equipment had to be carried out (for example the vessel could not perform the collection of oil/pollution and perform towing operations in that set-up). For a re-installation, the vessel either had to be brought back to the port facilities or another floating unit had to be used. Assessing this argument, the court came to the conclusion that the tender’s requirements related to functionality have to be properly interpreted at first. The court accepted this argument and maintained that the tender documents definitely require the vessel to be fully functional without any significant interference to the vessel’s operation. Further, the court concluded that LAF and the competitor did not prove that the competitor’s offer complies with the tender’s requirements.   
2. Material of the vessel’s superstructure. In the opinion of WBS, the tender’s documentation established a requirement that the vessel’s superstructure has to be constructed using steel. The competitor’s offer foresaw that the superstructure will be constructed partially from steel and partially from aluminum. Unfortunately, this argument was rejected by the court.  
3. The possibility to remove machinery and/or components from the engine room without cutting the vessel. The competitor’s offer did not include a possibility to remove machinery and/or components from the engine room without cutting/damaging the vessel. This conclusion was made based on the General Arrangement Plan (GA Plan) submitted by the competitor. The court accepted this argument and concluded that this argument was not denied by LAF and the competitor.  
4. Unusually long (240 months) warranty period for the main components of the vessel. In the opinion of WBS, the competitor’s offer establishing a 240 month additional warranty period for the main components of the vessel was (i) unusual in terms of industry practice and (ii) economically unreasonable. Unfortunately, this argument was rejected by the court.

CEEIHM: What’s next, following the court’s decision?

Andrius: The court judgment came into effect on May 12, 2021. The judgment inter alia withdrew interim measures (suspension of the tender) and from this date, the tender should continue. Unfortunately, LAF has not continued the tender – ignoring the judgment and WBS’s notices for resumption of the tender. Just recently, on June 14, 2021, we became aware that LAF submitted an appeal in cassation. That was the last date for an appeal in cassation. According to Lithuanian law, cassation proceedings are handled by the Supreme Court of Lithuania (SCL). The SCL is free to choose whether to accept an appeal in cassation or to refuse it.  

CEEIHM: Why did you choose Ellex Valiunas as your legal counsel for the matter?

Andrius: We, as a group of companies, and myself personally have a long and successful cooperation with Ellex Valiunas in arbitration and litigation cases as well as various legal matters related to public law fields. It was quite easy for us to choose Ellex Valiunas for this public procurement dispute – as I have my personal experience with the key persons, who took part in these proceedings. In other words – I trust the Ellex Valiunas team even in very extensive and complex matters.

Originally reported by CEE In-House Matters.

Former KPMG Law Attorney-at-Law Jonas Platelis has joined the Dispute Resolution team at the Primus law firm in Lithuania as Associate Partner.

According to Primus, “Jonas is a known litigation expert with experience of 18 years of litigation in national courts, arbitration, European courts (CJEU, ECHR), and international dispute resolution bodies.“ Platelis specializes in the fields of territory planning, real estate & construction, insolvency, finance, banking, and insurance law.

Prior to joining Primus in July 2021, Platelis spent two and a half years with KPMG Law and six years with the Pro Lege law firm in Klaipeda, Lithuania. 

“Jonas is a professional with invaluable experience,“ commented Marius Devyzis, Partner and Head of the Primus Dispute Resolution group. “I appreciate his ability to both manage the most complex projects and represent clients in resolving various disputes,” he said.

Sorainen has advised the Darnu Group on the acquisition of 8.3 hectares of land for the construction of residential buildings with commercial premises in Vilnius. 

According to Sorainen, the company plans to build approximately 900 apartments on the site. Construction is expected to start in the second half of 2022.

Sorainen’s team included Counsel Simonas Skukauskas and Senior Associates Julius Raskauskas and Gerda Skirbutiene.

TGS Baltic has represented Lithuanian Orion Asset Management in a case concerning a EUR 40,000 fine imposed by the Supervisory Authority of the Bank of Lithuania.

According to TGS Baltic, “the Vilnius Regional Administrative Court ruled that Orion Asset Management had not violated the law by concluding several transactions on its own account in shares of investment companies and investment fund units and, therefore, annulled the fine imposed by the Bank of Lithuania. It should be noted that the decision is not final, it can be appealed.”

TGS Baltic’s team included Partner Agnius Pilipavicius, Senior Associate Tadas Varapnickas, and Junior Associate Ieva Bilotaite.

Editor’s Note: On January 5, 2023, TGS Baltic announced that the Bank of Lithuania’s appeal saw “the Supreme Administrative Court uphold the findings of the Vilnius Regional Administrative Court and dismiss the appeal in full.” The firm’s updated team included Partner Agnius Pilipavicius and Associate Partners Tadas Varapnickas and Karolina Lapinskaite.

Inga Kostogriz-Vaitkiene, Partner at CEE Attorneys in Lithuania, reports that her country’s economy is doing quite well at the moment and that additional regulation ensures the public procurement system will become greener. She also notes that there are two controversial laws in the pipeline related to cannabis use and LGBTQ+ rights.

“The Lithuanian economy is booming at the moment, despite the ongoing pandemic,” Kostogriz-Vaitkiene says. She attributes the current state of the economy to the fairly mild and limited-in-effect waves of COVID-19, governmental spending, and increased internal consumption and savings levels within the general population. She points to the employment market as a growth-limiting factor, because of the high demand for skilled and experienced people, as well as a shortage of employees in labor-intensive sectors.

Almost all sectors are growing, she reports, with exception of the ones directly affected by lockdowns – tourism, hospitality, and the like. She says that Lithuania is becoming a fintech hub in Europe, with many foreign companies applying for licenses with Lithuania’s Central Bank. “The real estate market is exceptionally hot now – both new developments and existing properties are in high demand – driven by increased savings and the threat of inflation,” she adds. “The M&A deals market is breaking records this year, both in value and in number,” she concludes.

Kostogriz-Vaitkiene points out that there is a noticeable increase in litigation cases, mainly related to contractual disputes in the public procurement sector and on construction projects. As a result of the pandemic, she explains, more and more of the cases are carried out online. “Prior to the pandemic, litigation was conducted only in person and in court, but nowadays even criminal procedures are carried out online,” she details. However, she notes that if some of the parties demand in-person hearings, those may be allowed by the court.

Furthermore, Kostogriz-Vaitkiene reports that Lithuania is taking great strides to go green and, to that end, has allowed for public authorities to add additional requirements to public procurement tenders, so as to make them eco-friendly. “The requirements differ and are sector-specific, but the authorities are fairly free to choose the requirements they want,” she explains, noting that the target for green public procurement is set high: 10% of all procurements in 2021, increasing to 50% in 2022.

Moving on to legislation, Kostogriz-Vaitkiene says that, in order to increase investments in Lithuania, certain amendments to the Investment Law and other legal regulations were made. These established more favorable conditions for foreign investors relocating their business to Lithuania and made it easier for their employees and family members to get employment and residence in Lithuania. She mentions there are interesting developments regarding the legalization of medicinal cannabis and on the law for LGBTQ+ partnerships. “The law on LGBTQ+ partnerships was drafted after the government promised that it will regulate the matter, but the original version was rejected and has to be revised,” she says, expressing her hope that the law will soon enter parliament and be passed.