Category: Lithuania

Cobalt has advised IISUTIB Raft Capital Baltic Equity Fund on raising EUR 50 million in investments.

IISUTIB Raft Capital Baltic Equity Fund is an investment fund founded by Raft Capital Management.

According to Cobalt, “the fund plans to invest in rapidly growing companies in Lithuania and other Baltic countries, with a particular focus on small and medium-sized enterprises in the Baltic States that are currently growing or have significant growth potential. The European Investment Fund, INVEGA, Luminor, and other private investors invest through Raft Capital Baltic Equity Fund. The goal of investments is to help companies grow and become more appealing to international investors.”

The Cobalt team included Partner Akvile Bosaite.

On April 24, 2024, the European Parliament adopted a resolution for a directive aimed at improving working conditions on platforms. This is a significant step towards addressing the needs of platform workers, such as ‘Bolt’ and ‘Wolt’ couriers, throughout the European Union.

The main goal of this directive is to introduce a presumption of employment for platform workers, clarifying their employment status and granting them rights and social guarantees arising from employment relationships. This is crucial, as the employment status of these individuals remains unclear. The forthcoming directive also focuses heavily on regulating the use of algorithms by digital labor platforms, ensuring that decisions affecting the employment of individuals working through these platforms are fair and transparent.

Key Provisions of the Directive

The European Parliament approved several key conditions: algorithms used on platforms must be transparent to ensure fair decisions regarding task assignments, worker performance evaluations, and compensation; platform workers have the right to request a human review of decisions made by automated systems, especially when disputes arise over task distribution or evaluation; the directive mandates the protection of personal data and privacy, requiring platform companies to comply with the EU General Data Protection Regulation (GDPR) and ensure lawful and transparent data processing.

EU member states must amend or adopt new national laws to meet the directive’s criteria, helping to determine when platform workers should be considered employees. For instance, it is necessary to clearly indicate when a platform worker is regarded as an employee and when as a service provider. This includes the level of personal control, the exclusivity of the work relationship, and the significance of the worker’s role in the core business activities.

Aim – A Safer and More Reliable Working Environment

The resolution reflects the European Union’s commitment to modernizing labor law to keep pace with digital transformations and the changing nature of work. It aims to create a safer and more reliable working environment for all platform workers, ensuring they can benefit from social protection and work-related benefits typical of traditional jobs. However, considering current court practices in Lithuania, where if these characteristics are present: first – the person performs a work function rather than focusing on the result, second – the person is paid a salary for performing the work function; third – the person is subordinate to the employer, and other specified circumstances, the relationship is recognized as employment. Therefore, when transposing the directive’s provisions into national law, it is important to consider both court-established practices and the uniqueness of the activities of individuals operating on platforms.

This change is seen as a potential shift that could improve working conditions for individuals working in the so-called “gig” economy. It also aligns with the broader EU objectives to ensure fair working conditions and social protection within the common market.

The “Gig” Economy – A Rapidly Growing Labor Market Segment

In 2023, the platform (or “gig”) economy grew significantly worldwide and now constitutes about 12% of the global labor market. Men make up 31% of platform workers, women 18%. The largest age group is 25-34-year-old workers, with an average hourly wage of $19. Workers aged 55-64 earn the most, at $36 per hour. The United States has about 76.4 million freelancers, with annual earnings reaching $1.3 trillion. Currently, the majority of freelancers are in the US and India.

By Ruta Globyte, Attorney at Law, Associate Partner at WIDEN Law Firm

Averus has advised sellers Arunas Suika and Renata Suikiene on their sale of VS Fitness – operating eight fitness clubs in Lithuania – to Gym Plius. Ellex Valiunas reportedly advised the buyer. Estonian investment bank LHV financed the transaction.

Financial details were not disclosed. According to Averus, before the merger, “Gym Plius operated 16 24/7 fitness clubs in Lithuania and VS Fitness [operated] 8 fitness clubs.”

“There could not be a better buyer and partner that would bring more value and ensure a better future for the company,” the sellers of VS Fitness commented.

“VS Fitness is a fitness club with a long experience in 24/7 operations, providing a high level of services throughout Lithuania, so it will not be difficult to transfer the standards of Gym Plius here,” Gym Plius Director Mantas Badikonis commented. “VS Fitness has been operating in Kaunas, Klaipeda, Siauliai, Alytus, Marijampole, and Mazeikiai.”

Gym Plius is reportedly Lithuania’s largest 24/7 fitness club chain and is owned by Estonia-based My Fitness AS, a provider of fitness club services in the Baltic States.

The Averus team was led by Associate Partner Lina Taletaviciute-Misiuniene.

Fort has advised EIKA Grupe on its purchase, together with the Etapas Group, of the plot and project planned for the site at 4 Seinu Street, in Vilnius, from NT Pletros Grupe. Sorainen reportedly advised the seller.

Eika is a real estate developer and construction service provider in Lithuania.

The Etapas Group is a real estate company.

In the first phase of the project, seven two and four-story building blocks will be built, with a total of 83 apartments. Their areas range from 27 to 127 square meters. In total, by the end of 2027, 175 apartments and seven separate commercial premises will be built as part of the project.

The Fort team included Partner Ruta Radzeviciute-Meizeraite.

TGS Baltic has advised Coinvest Capital on liquidating its investment in Lithuanian crisp producer Chazz through the sale of its 26% stake to the company’s founders and other shareholders.

According to the firm, the transaction happened exactly six years after the fund’s first investment in the Gusania company, which produces Chazz chips.

“There are many symbolic details in this deal – we are closing the investment after exactly six years, it was the fund’s first investment, and, what is there to hide, the most prominent, because the company’s founders deliberately chose the role of industry hooligans,” Coinvest Capital Director Viktorija Trimbel commented. “This is a typical MBO deal where the ownership is bought out by the executives, which means that the most important people in the company take on the full burden of responsibility and believe in the prospects of the business. Respect to them and good luck in their growth!”

“We thank Coinvest Capital for believing in the idea of ​​producing healthier snacks at a time when the only chip producer left Lithuania, and financial institutions kept repeating as a prayer that there was not a single successful food startup during the entire period of Independence,” UAB Gusania Director Zilvinas Kulvinskis added. “For us, this investment was a commitment to raise the highest operational standards and create added value here in Lithuania. For several years now, Lithuanian vegetable snacks have been traveling to more than 30 countries around the world, we pay our employees much higher than average salaries, [and] we use the services of dozens of Lithuanian companies.”

The TGS Baltic team included Partner Dalia Tamasauskaite-Ziliene, Associate Evelina Savickaite, and Legal Assistant Meda Stankute.

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

TGS Baltic has advised the investors, including Scale Wolf VC and Linas Sargautis, on participating in Vilnius-based Blackswan Space’s EUR 760,000 pre-seed funding round.

Blackswan Space is a space tech start-up developing software products for space & defense missions. According to the firm, “since 2019, Blackswan Space has pioneered autonomous space technologies in collaboration with the European Space Agency and commercial partners.” The company will use the funding to grow its engineering staff, accelerate product development, and scale its commercial activities.

Blackswan Space’s Mission Design Simulator “enables customers to simulate complex spacecraft maneuvers for in-orbit servicing, object retrieval missions, space domain awareness, or simulating satellite constellations in real time. The Vision Based Navigation hardware payload, running proprietary algorithms, enables spacecraft to perform autonomous navigation maneuvers when control from the ground is not possible,” TGS Baltic reported.

“With the new infusion of capital, the company is well positioned to accelerate MDS and VBN development and commercial activities in 2024, preparing for in-orbit demonstration of its core technologies in the next few years – all part of the bigger picture to support the exponential growth of the in-space economy,” the firm announced.

The TGS Baltic team was led by Senior Associate Paulius Dabulskis.

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

Walless has advised the Typhoon Wealth Group Limited on its acquisition of Lithuania’s Ambr Payments.

Ambr Payments is an authorized electronic money institution regulated by the Bank of Lithuania offering dedicated European IBAN accounts, multi-currency wallets, and access to various marketplaces, among others. Authorized by the Bank of Lithuania in 2020 (as reported by CEE Legal Matters on June 17, 2020), Ambr Payments targets small and medium enterprises within European online marketplaces.

According to Walless, “now, with a new investor – the Typhoon Wealth Group Limited, an international group headquartered in London and powered by a fully integrated European digital banking platform – Ambr Payments is set for growth and technological advancement.”

The Walless team included Partner Gediminas Reciunas, Associate Partners Akvile Marozaite, Asta Lygnugaryte, and Marija Grigaraviciene, and Associate Ieva Pikaite.

Walless did not respond to our inquiry on the matter.

TGS Baltic has advised InMedica on its acquisition of the Panevezio Odontologai clinic. Glimstedt advised the seller.

InMedica is a Lithuanian provider of private medical services.

Panevezio Odontologai is a dental clinic operating in Panevezys. The clinic has been in operation since 1959.

Back in 2022, TGS Baltic advised on InMedica’s acquisition of the Vilnius Implantology Center Clinic (as reported by CEE Legal Matters on September 29, 2022).

The TGS Baltic team included Partner Dalia Tamasauskaite-Ziliene and Senior Associates Jonas Salna and Ruta Tikuisyte.

The Glimstedt team included Associate Partner Audrius Zvybas, Senior Associate Jurgita Zakarauskiene, and Associates Goda Dugnaite and Simona Butkute.

On April 4, 2024, Ellex Valiunas announced that Kogeneracija’s full sale of Miesto Energija and Pramones Energija and a 4,34% stake in Klaipedos Energija to Vilniaus Silumos Tinklai (reported by CEE Legal Matters on December 1, 2023) had closed at the end of March for EUR 10.6 million.

Kogeneracija is part of the E Energija group. Miesto Energija manages the heat supply network in the Klaipeda Free Economic Zone. Pramones Energija produces heat and electricity in its biofuel cogeneration plant, supplying it to Klaipeda city.

According to Ellex, Vilniaus Silumos Tinklai is the largest centralized heating production company in Lithuania.

“It is estimated that following the transaction, the heat sold by VST will increase by 99 gigawatt-hours annually, and the company’s managed centralized heat network has expanded by 6.2 kilometers after taking over part of the network in Klaipeda FEZ,” the firm reported.

As previously reported, Ellex advised Kogeneracija. TGS Baltic reportedly advised the buyer.

The Ellex team included Partner Ramunas Petravicius and Senior Associates Arvydas Gruseckas and Andrej Jemeljanov.

Former Associate Partners Azuolas Cekanavicius and Povilas Junevicius have been promoted to Partner positions with Ellex in Lithuania.

Junevicius has been with Ellex for fifteen years, starting his professional career with the firm while he was still a student. According to Ellex, he has “been working in the Corporate and M&A practice team for all these years.”

Cekanavicius, a patent specialist, has been with Ellex for four years. Earlier, he spent eleven years with Raulynaitis, Zemkauskiene and Partners.

“I am thrilled about the expansion of our partnership team at the law firm, which has increased by over one-third in the past five years,” Managing Partner Rolandas Valiunas commented. “Both Junevicius and Cekanavicius have been with the law firm for a number of years. They have earned the trust of clients and the appreciation of colleagues, so this change is very organic, anticipated, and gratifying for the entire team of partners.”