Category: Lithuania

Primus has represented and advised UAB Litagra, one of the largest agricultural companies in Lithuania, on its now-completed reorganization and division into two companies: UAB LP Grupe, which will take over the trade and elevator business, and UAB Litagra, which will operate the activities of feed production and agricultural business.

According to Primus, “Litagra Group is a leading Baltic agricultural group. Group companies are engaged in the production of primary crop and livestock products, grain processing, agricultural services, as well as corporate management, consulting and investment …. [Its] reorganization was necessary to complete the transaction with Achema Group, which acquired the trade and elevator business.”

Primus Partner Ernesta Ziogiene and Associate Sarune Prankonyte led the firm’s team.

Ellex, representing the Vilnius-based UAB Ozantis real estate developer, has helped facilitate a settlement agreement between some 32 entities and containing more than 16,880 signatures that, having been approved by the Vilnius City Council, brings an end to a 16-year dispute regarding investments in the 60-hectare territory of the Siemens Arena in Vilnius.

Siemens Arena, which opened in October 2004, is the second largest arena in Lithuania and it hosts basketball games and concerts. The arena opened on October 30, 2004. The arena was built in the Vilnius Entertainment Park territory, which is still under development. The other buildings in the Vilnius Entertainment Park include an indoor water park, a family entertainment center, an event field, and a park.

According to Ellex, the original agreement on the investments was made in 2001 and the first challenges to the validity of the agreement were made in 2002. Ellex reports that “the agreement was subsequently revised by many authorities, including the prosecutor’s office, the State Control, the Seimas’ commissions and courts; however, they did not find the agreement to be unlawful. In 2012, the General Prosecutor’s Office changed its mind and appealed against the agreement before the court, [with] 31 defendants and 9 third persons … involved in the proceedings.

After four years of litigation and nine months of legal mediation, the proceedings for recognition of the agreements on use of the land as invalid ended in a settlement agreement …. by this agreement, the municipality will receive EUR 1.5 million and users of the territory will get new lease agreements with the agreed conditions. This was the first successful mediation in the practice of both the General Prosecutor’s Office and Vilnius City Municipality.”

The Ellex team included Partner Raimundas Lideika, Expert Nijole Vaiciunaite, and Senior Associate Gabriele Vazniokaite.

Laurynas Lukosiunas, head of the Public Procurement practice at the Sorainen’s Lithuanian office, has become the 12th Sorainen partner in Lithuania and the 29th in the region.

Sorainen Lithuania Managing Partner Tomas Kontautas commented that, “as head of the Public Procurement practice at the Sorainen Lithuanian office and working on large-scale public-private partnership (PPP) projects, Laurynas demonstrates excellent leadership skills. Clients appreciate his professional approach and capacity to solve complicated legal issues effectively and swiftly.”

According to Kestutis Svirinas, head of the Sorainen Dispute Resolution Team in Lithuania: “Not only is Laurynas an expert in public procurement but he also has extensive professional experience in litigation. He has been successful in maintaining clients’ interests in complex legal disputes and well-known legal cases. When representing clients he always acts according to the highest ethical standards and his actions are always based on values such as the priority of client interests, credibility and integrity.”

Lukosiunas joined Sorainen in 2011 after spending the previous six years at the Balciunas & Grajauskas law firm. He holds a master’s degree in law from Vilnius University.

TGS Baltic has represented UAB INVL Asset Management and funds managed by it on the acquisition of shares in Lithuania SME Fund and BaltCap Latvia Venture Capital Fund from UAB SEB Venture Capital. Sorainen advised the sellers on the deal.

UAB INVL Asset Management is a Lithuanian asset management company managing pension funds, investment funds, and private equity and investment portfolios. According to TGS Baltic, “the company manages four pension funds of the 2nd pillar and four pension funds of the 3rd pillar. On June 30, 2016, funds managed by UAB INVL Asset Management had the most participants in Lithuania (over 6,200 participants) and the company held 46.73 percent of the funds market. Investment funds managed by UAB INVL Asset Management are offered in Lithuania, Scandinavian countries, and Germany. Companies of this group manage pension and investment funds, alternative investments, individual portfolios, private equity and other financial instruments. Assets under their management are worth EUR 340 million, they belong to over 150,000 clients in Lithuania and Latvia and to international investors. Assets managed by the investment funds of the company amounted to EUR 41.2 million as on June 27, 2016.”

According to TGS Baltic, its services on the deal “included preparation and approval of the framework share purchase agreement, preparation of the new Lithuania SME Fund operational agreement and other documents in connection with the change, representing the fund and investors in the Register of Legal Entities, coordination of actions regarding the Latvian fund, etc.”

The TGS Baltic team was led by Partner Vidmantas Drizga, supported by Senior Associate Mantas Gofmanas.

The Sorainen team advising SEB Venture Capital in the transaction was led by Counsel Mantas Petkevicius.

Sorainen has advised Lietuvos Energija in establishing a EUR 1 billion Euro Medium Term Note Program and on preparations to issue and distribute the first tranche of up to EUR 200 million. Ellex Valiunas represented BNP Paribas and SEB on the program.

The tranche will be primarily listed on the official list of the Luxembourg Stock Exchange and will also be listed on the Debt Securities Trading List of Nasdaq Vilnius.

This is the first time in the Lithuanian market that a state-controlled company is diversifying its debt portfolio by issuing bonds. It is also the first issue in Lithuania of so-called “green bonds” under which the proceeds will be invested in green energy projects. 

According to Sorainen, “Lietuvos Energija group is a state-controlled company group and one of the largest of its kind in the Baltic States. The main activities of Lietuvos Energija group include power and heat distribution and supply, natural gas trade and distribution as well as construction and maintenance of power plants and the grid.” In addition, according to the firm, “Standard & Poor’s has awarded the Lietuvos Energija group a BBB+ rating with stable perspective. This is the highest rating in the Baltic States among companies from the same sector.”

The Sorainen team included Partners Tomas Kontautas and Saule Dagilyte, Senior Associate Dalia Augaite (who led the project team), Counsels Augustas Klezys and Paulius Koverovas, and Associate Laura Matukaityte.

Editor’s Note: After this article was published, Dentons announced that it also advised Lietuvos Energija, UAB on the bond issue, and reported that Clifford Chance worked alongside Ellex in advising the underwriters. According to Dentons, “Lietuvos Energija was initially expected to bring a EUR 200 million green bond to market, however, the deal defied expectations with an oversubscribed book which enabled the issuer to print a EUR 300 million bond from a EUR 1.4 billion book. The bonds were issued under Lietuvos Enegija’s EUR 1 billion Euro Medium Term Note (EMTN) Programme, and Dentons also advised the company on the establishment of the EMTN Programme.”

Former Ellex Valiunas Senior Associate Povilas Junevicius has moved from that firm to Primus in Lithuania, which he joins as an Associate Partner.

According to Primus, “Povilas Junevicius is an experienced corporate and M&A lawyer. He represents clients in acquisitions, mergers, joint ventures, financing and general corporate matters. He also represents clients in related disputes.” Prior to joining Primus, Junevicius worked at Ellex Valiunas for 9 years.

“Following the changes and tendencies in the business market and with the goal to serve the needs of our clients in the best possible manner, we are expanding corporate and M&A practice at the firm,” said Giedre Dailidenaite, Partner and Head of Corporate and Commercial Law practice at Primus Lithuania. “The addition of Povilas Junevicius to our team will certainly have a positive impact on the strength of our team. He has significant experience in sophisticated M&A transactions, shareholders’ disputes, advising foreign companies on entering the Lithuanian market, etc. His knowledge and experience covers various industry sectors: energy, pharmacy, real estate, IT, trade and others.”

Motieka & Audzevicius has represented AB Kauno Grudai, one of the largest agriculture companies in Lithuania, in an investigation initiated by the Lithuanian Competition Council.

According to M&A, the investigation was initiated after adoption of the ruling of October 15, 2014 of the Court of Appeal of Lithuania holding that “the transactions impugned were fictitious and the real party to the said transactions was AB Kauno Grudai. As a result, the Competition Council held that an illegal concentration had been carried out. In this case, the competition authority tries to change the existing case-law arguing that a shareholder retains control over an undertaking during the whole bankruptcy procedure even though a shareholder does not hold the power of a controlling majority nor possesses the right of veto at the meeting of creditors.”

The Competition Council‘s decision may still be challenged before the Vilnius Regional Administrative Court.

Sorainen has assisted Contrarian Ventures on its successful tender to become manager of a venture capital fund established by Lietuvos Energija.

Lietuvos Energija, the state-owned Lithuanian energy company, has invested EUR 5 million in the fund, with the same amount expected to be attracted from other investors. The fund investment period will be five years, with companies receiving financial injections worth up to EUR 300,000. The total lifetime period of the fund will be 10 years.

Contrarian Ventures will be managed by an international team of seven partners investing in Lithuania, the Netherlands, and Israel.

The Sorainen team advising and representing Contrarian Ventures during the tender procedure and in negotiations with Lietuvos Energija consisted of Senior Associate Karina Andriukaitiene and Associates Artūras Asakavicius and Laura Ryzgelyte.

Sorainen has represented Alfa Bank in a dispute over loans personally granted by Lithuanian businessman Vidmantas Kucinskas to Arvi NKP, which operates a fertilizer factory in Kaliningrad.

Alfa Bank lent over EUR 10 million to Arvi NKP, according to contracts made in 2012-2014. In 2015 one of the Arvi group companies faced financial problems and Kucinskas agreed to provide an additional guarantee to the bank, taking personal responsibility for fulfilling Arvi NKP’s obligations towards the bank.

However, Sorainen reports, “Arvi NKP and Kucinskas did not fulfill their obligations,” and “as a result, Alfa Bank brought an action in the Moscow Meschansk Court on June 9, 2016 and in the London Court of International Arbitration on September 20, 2016. The Moscow Meschansk Court fully upheld Alfa Bank’s action and the court’s decision came into force on January 26, 2017. At the same time Vilnius Regional Court ordered seizure of Vidmantas Kucinskas’ assets worth over EUR 14 million, a decision based on the ongoing process in the London Court of International Arbitration.”

According to Sorainen, “it was revealed that the businessman, considered to be one of the richest individuals in Lithuania, might possibly not have assets of such value. Just one day after the decision by the Moscow Court, the majority shareholding in Vyrja, which controls companies in the Arvi group, was transferred to Vidmantas Kucinskas’ son, Justas. Alfa Bank sought to challenge the transfer of Vidmantas Kucinskas’ shares to his son and brought an action before the Kaunas Regional Court, which arrested all the shares that had been transferred to Justas Kucinskas and ordered him not to dispose of the shares or exercise privileges associated with the shares.”

On June 9, Sorainen reports, the Kaunas Regional Court upheld Alfa Bank’s civil claim and declared that the transaction by which Vidmantas Kucinskas gifted shares in Vyrja to his son was invalid, as he had “acted in bad faith in respect of the creditor, Alfa Bank.”

The Sorainen team advising Alfa Bank included Partner Kestutis Svirinas, Senior Associate Jonas Sakalauskas, and Associate Vita Sabalyte. Alfa Bank was represented in court by Senior Associate Laurynas Lukosiunas.

Sorainen has advised Harbortouch, a provider of touch-screen point-of-sale (POS) systems and payment services in the USA, on its launch of operations in Vilnius.

According to Sorainen, a Harbortouch product creation and development unit in Vilnius is to employ 80-90 people over the next few years; plans also involve establishing a global call center in the Vilnius office.

According to Jared Isaacman, founder and CEO of Harbortouch, Vilnius was chosen due to its well-developed infrastructure and technology penetration. A significant talent pool in Vilnius plus positive feedback from other US investors were also important factors in the decision-making process.

Founded in 1999, Harbortouch currently serves around 300,000 businesses and is one of the largest providers of payment solutions in the USA, processing some USD 10.5 billion annually.

The Sorainen team was led by Partner Sergej Butov, who commented: “In assisting technologically advanced companies such as Harbortouch to enter the Lithuanian market we serve our core purpose – increasing prosperity in the Baltic States and Belarus by helping clients succeed in business. We are delighted that our efforts to provide a high quality service and improve the legal environment for business are showing results.”

Butov was assisted by Sorainen Senior Associate Evaldas Dudonis and Associate Laura Matuizaite.