Category: Lithuania

Dispute Resolution specialist Zygimantas Pacevicius has moved from Sorainen to Cobalt in Lithuania.

Pacevicius − who becomes Cobalt’s 17th partner in Lithuania (it also has one associate partner) − will be a member of the firm’s Dispute Resolution team. Cobalt reports that he “will be actively involved in disputes in insurance and finance, management liability, insolvency, and the media.”

Pacevicius spent 12 years at Foigt & Partners, making partner in 2008, before joining Sorainen in 2015. 

“2020 is a challenging year for everyone but it is also a good time for change,” said Cobalt Lithuania Managing Partner Irmantas Norkus about Pacevicius’ joining the firm. “We do not plan to stop and continue to strengthen our team. We expect the market to intensify in the coming years, especially in the area of Dispute Resolution. We are glad that strong professionals choose to work with us.”

As elsewhere in the EU, Walless Partner Gediminas Dominas says, “the thing that Lithuanian lawyers are still talking about is how the reality of an ongoing pandemic is affecting everyday activities.” According to him, “it has affected everything, really, but mostly litigation and disputes – do we go into courtrooms or do things online, and if so, how we confront witnesses, how we ensure confidentiality, witness identity and integrity if it’s all online?”

Despite the relative success of the country’s initial measures to control the virus, more have become necessary. Dominas reports that “with the second wave of the virus being a tangible reality, additional restrictions have been put in place recently,” particularly on the number of people that can be allowed indoors at any one time and the requirement that PPE rules will be “enforced more rigorously.”

Lithuania will hold Parliamentary elections in the next few months, Dominas notes. “This is keeping politicians occupied quite a lot,” he says, “so there haven’t been any other things of note – even legislative processes have halted, with all eyes fixed on the elections.”

In the meantime, Lithuania has seen a strong outpouring of support towards the people of Belarus, following the turmoil that that neighboring country experienced after its own August elections. “Both the Government and the people themselves have been expressing a lot of support for the citizens of Belarus,“ Dominas says. “One Sunday at the end of August, Lithuanian people made a 32km-long human chain that stretched from Vilnius towards the Belarus border, to demonstrate solidarity.”

Dominas thinks Belarus businesses might migrate to Lithuania as a result of the upheaval there. “Given the troubles in Belarus and the warm support Lithuania has expressed,” he says, “I think that we might see a move by a lot of businesses by the end of the year.“ In light of Belarus’s strong IT workforce, he says, a move to Lithuania “might be a logical thing, especially given the ease with which the IT sector can move house.“

Finally, Dominas reports that “the largest energy company in Lithuania, IGNITIS, is bound for an IPO with a possible listing in London.” He describes this deal as “potentially rather large and, given the relative size of Lithuania’s market and the fact that deals of this kind occur once every three or four years, very important.”

Watson Farley & Williams has advised the Froelich family on their sale of Froelich Internationale Transporte GmbH & Co. KG to Lithuania’s Transimeksa Group.

Financial details were not disclosed.

According to WFW, “founded, owned and managed by the Froelich family since 1883, and including a fully-owned Polish subsidiary, Froelich developed an intermodal transport and logistics company operating between Germany and Italy via a direct rail connection, thereby bringing together northern and southern European markets across the Alps. The link is both environmentally friendly and commercially viable, and the Froelich family will be advising Transimeksa to ensure a smooth hand-over of the business. Following its acquisition of Froelich, Vilnius-headquartered Transimeksa will have 1,200+ employees, a fleet of more than 600 trucks and 800 trailers, and 46,250 square meters of warehousing space and offices in Lithuania, Germany, Russia, Italy, Latvia, Estonia, and Belarus. Transimeksa also acquired the real estate on which Froelich operates its business.”

Watson Farley & Williams’ Germany-based team included Partners Christoph Naumann, Verena Scheibe, and Sebastian Baum, Associate Matthias Strecker, and Lawyer Janine Henger.

Watson Farley & Williams did not reply to our inquiry on the matter.

The Lithuanian office of Cobalt and Denmark’s Accura law firm have advised INVL Baltic Sea Growth Fund on its acquisition of a 48% stake in MBL from Accession Mezzanine Capital III and the Lauritsen family. The Horten, Gessel, and Norton Rose Fulbright law firms reportedly advised the sellers.

Financial aspects of the acquisition were not disclosed.

According to Cobalt, “prior to the acquisition … MBL was 70% owned by the Lauritsen family, which founded the company in 1988, with the remaining 30% ownership held by Accession Mezzanine Capital III. As a result of this deal, the fund … indirectly acquired 48% of MBL while the remaining 52% will continue to be owned by the Lauritsen family.” 

MBL is a Danish manufacturer of wheelchairs, rolling walkers, and other rehabilitation equipment. Its manufacturing facilities are located in Poland and China. 

Cobalt‘s team in Vilnius consisted of Partner Elijus Burgis and Senior Associate Deimante Pagiriene.

Editor’s note: After this article was published, Gessel informed CEE Legal Matters that it had advised Accession Mezzanine Capital III on the deal. The firm’s team included Partner Malgozata Badowska, Senior Associate Krzysztof Jasinski, and Associate Katarzyna Matyszewska.

Walless has helped Railsbank Group subsidiary UAB Payrnet obtain an electronic money institution license from the Bank of Lithuania.

According to Walless, “Railsbank is a leading global open banking and RegTech platform that enables any bank, business, or brand to become a FinTech rapidly.” According to the firm, “Railsbank opened an office in Vilnius in 2018 and has an engineering team of around 30 people, ensuring the group’s further growth globally.”

Walless’ team included Partner Joana Baublyte-Kulviete, Associate Partner Lina Radaviciene, Senior Associate Simona Kisunaite, and Junior Associate Viktorija Zemaityte.

Walless has advised E Energija on a green energy purchase deal with Eesti Energia.

According to Walless, “Eesti Energia will purchase all the green energy produced by the future wind farm within ten years. “

Walless’ team included Partner Vaidotas Puklevicius and Associate Gabriele Adomaviciute.

Sorainen and Motieka & Audzevicius have advised Startup Wise Guys and the Motieka Investment Fund on a EUR 1.2 million investment in Lithuanian edu-tech start-up Turing College. Motieka & Audzevicius also advised Turing College on the deal.

A large part of the investment came from EU funds and private investors Tesonet Group, Omnisend, and Unity Technologies LT.

Sorainen’s team was led by Senior Associate Vytautas Sabalys.

Motieka & Audzevicius’s team consisted of Senior Associate Rokas Jankus and Associate Laurynas Ramonas.

Motieka & Audzevicius has helped Donatas Aleksandravicius, the owner of the Ds Byggeri construction company, file an indemnification claim against Denmark at the ICSID.

Donatas Aleksandravicius is seeking compensation for damage caused by protestors at his company’s construction site in Copenhagen and related financial harm under the Lithuania-Denmark bilateral investment treaty.

According to Motieka & Audzevicius, “Aleksandravicius and Ds Byggeri filed an initial notice of arbitration in February but opted to then negotiate with the Danish government, a process that was postponed due to the COVID-19 pandemic and resulting lock down. However, in July the Danish Ministry of Justice wrote a letter to Motieka & Audzevicius Partner Rimantas Daujotas saying that the government rejected Aleksandravicius’ claim and his settlement proposal. Denmark’s refusal to negotiate prompted him to file the more recent request for arbitration that has now been registered by ICSID.”

Motieka & Audzevicius’s team was led by Partner Rimantas Daujotas and included Denis Parchajev. 

The ongoing COVID-19 pandemic and various related restrictive measures have created an extraordinary human, business, and legal situation in Lithuania. The Energy sector (like all others) has become subject to various restrictions and challenges, including restrictions on the movement of workers, partner liquidity issues, reduced demand for energy resources, etc. As everywhere else in Europe, Lithuanian electricity market participants have faced a significant decrease in wholesale electricity market prices. Moreover, it is already clear that COVID-19 has negatively affected the international supply chain, as the energy market participants experience disruptions and delays in the performance of contracts and project delivery. In these extraordinary circumstances, industry players (including operating power plant operators, project developers, and so on) have a reasonable expectation that the government will take the effect of the ongoing international crisis into account if developers do not bid in time in auctions or miss their project deployment deadlines.

However, despite the gloomy introduction, we are highly pleased and proud to report that even against the background of this unexpected crisis, Lithuania is maintaining its direction towards green energy. Our small and young country is among the five most ambitious countries in the European Union in terms of renewable energy targets for 2030, and it is projected that by that year, 45% of all the electricity consumed in Lithuania will be produced from renewable energy sources.

While it can be assumed that all of these are loud phrases and formal numbers in political strategies, the actual transformation of the energy sector – including the regulation and development of actual production capacity – in Lithuania is obvious. With the latest changes in regulations, Lithuania has followed the Danish, Dutch, and German examples of encouraging local electricity generation development. The Law on Electricity and the Law on Energy from Renewable Sources created the conditions for residents and local communities to manage and develop power plants using renewable resources for energy production – to produce, consume, and accumulate energy in their storage facilities and sell the energy produced. In order to encourage businesses and households to become prosumers and self-supply green electricity, procedures have been simplified and streamlined. Prosumers can currently install power plants using renewable energy sources with a capacity of up to 500 kilowatts (kW). Building power plants with a capacity of less than 30 kW requires almost no permits and the process takes up to three weeks – whereas a year ago it took up to six months. Thus, it is expected that these communities will be more and more involved in the development of small-scale renewable energy, and locals will have more opportunities to attract investments in renewable energy.

In addition, the government is also paying attention to large-scale energy generation. This Spring, the Ministry of Energy began to prepare a draft resolution for coordinating locations in the Baltic Sea where it is expedient to develop wind farms. Although legislation governing offshore power generation, permit procedures, auction rules, and many other important documents has not yet been adopted, it is expected that the first auctions for offshore wind power will be announced in 2023. The power plants should be built and start generating electricity by 2030.

Active changes are also taking place in the electricity trading market. The Parliament of Lithuania unanimously approved amendments to the Law on Electricity, meaning that the regulation of retail electricity prices for household consumers will be abandoned in stages by 2023. This means that there will be a transition from a regulated retail electricity market to one that is based on competition. Along with the abandonment of electricity price regulation for household customers, smart meters will also be introduced. Smart electricity metering systems, smart grids, and a common platform for data collection and exchange will, in the long run, make it much easier for residents to monitor and assess their electricity consumption needs and choose the most appropriate electricity supplier offer.

What does all this mean for business? In our view, these significant regulatory changes clearly indicate that local renewable energy production remains a state priority. This justifies the expectation that the transition to clean energy will accelerate over time and thus benefit all stakeholder groups – the state, consumers/communities, and business. We sincerely hope that the favorable investment conditions in the energy sector can restart and will serve to revive a stagnant economy in a sustainable way.

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

This Article was originally published in Issue 7.6 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Glimstedt has advised GE Energy Financial Services on an unspecified investment in E Energija‘s 68.9MW wind farm in Telsiai, Lithuania, which uses GE‘s Cypress 5.3MW turbines. E Energija was advised by Ellex Valiunas.

Although Glimstedt described the deal as “one of the largest transactions in Lithuania recently and the first investment of this kind by a global energy giant in Lithuania,” no other details were provided.

Glimstedt’s team included Partner Ausra Maliauskaite-Embrekte, Associate Partner Audrius Zvybas, Senior Associates Jurgita Zakarauskiene, Michailas Molis, Justinas Poderis, Daiva Cekanaviciene, and Arturas Tukleris, and Associates Laura Tunkeviciute and Simona Butkute.

The Ellex Valiunas team was led by Partner Giedrius Stasevicius.