Category: Poland

On 22 May 2020 the Government of Poland published a proposal for a new law on the screening of foreign investments in Poland. The new screening tool aims to protect public security, order and health during the COVID-19 pandemic, and will introduce a new notification obligation for investments into Polish companies.

The screening will be carried out by the Office for Competition and Customer Protection (the “Office“). Once in force, the new law will thus set in place a screening mechanism referred to in EU FDI Screening Regulation 2019/452. So far, FDI screening in Poland was limited to a very narrow defined set of selected companies. It is planned that the new screening instrument will be in force for two years.

Scope of the proposed law

Under the new legislation, investments by non-EEA investors resulting in – among others – an acquisition of control or an acquisition of a significant participation, including a share of at least 20 % in protected entities, will require prior screening and approval by the Office.

The new law captures investments in companies that have their seat in Poland, achieved revenues in Poland (from the sale of goods or services) exceeding EUR 10m in at least one of the last two years and at the same time:

• are public (listed) companies; or
• own assets defined as critical infrastructure under Polish law; or
• develop software for a strategic sector; or
• operate in specified “critical” sectors such as telecommunications, power generation and distribution, fuel production, transport and storage, production of chemicals, manufacturing of medicines or medical devices, processing of meat, milk, grains, fruits and vegetables, manufacturing and trade of arms and ammunition as well as technologies used for military purposes, etc.

It is envisaged that the government will have the right to narrow down the aforementioned list of protected entities.

Procedural provisions and sanctions

The investments by non-EEA investors will require prior notification to the Office. For routine cases, a review period of 30 business days is envisaged (phase 1), while in more complex cases the authority can launch an in-depth review (phase 2) which can last an additional 120 days.

The draft law provides for a standstill obligation and stop-the-clock mechanism in case of an information request.

The implementation of a relevant investment in spite of the objection or without a notification are null and void (and the decisions of the corporate bodies of the protected entities may be challenged as null and void).

In addition, the proposal envisages sanctions for breaches of the proposed rules: a fine of up to PLN 50m (approx. EUR 12m) or imprisonment of six months to five years may be imposed on persons who were obliged to notify (or, in certain instances, representatives of the protected entities).

The proposal for the new law is now with the Parliament.

By Volker Weiss, Partner, Krzysztof Pawlak, Counsel, and Pawel Kulak, Attorney at Law, Schoenherr

On April 14, 2020, CEE Legal Matters reported that Dentons had advised Savills Investment Management, acting on behalf of Korean institutional investors managed by Vestas Investment Management, on its acquisition of the Leroy Merlin distribution center near Lodz from Invesco Real Estate. We spoke to Alistair Ennever, Transaction Manager at Savills Investment Management, about the deal.

CEELM: To warm up, tell us a few words about Savills Investment Management. 

Alistair: Savills IM is an international real estate investment company with offices in the UK, Germany, Netherlands, Spain, France, Italy, Sweden, Luxembourg, and Poland, as well as in Australia, Japan, and Singapore. Savills IM currently has approximately EUR 20.75 billion worth of assets under management — of which approximately EUR 1.25 billion is located in Poland.

CEELM: You completed this acquisition on behalf of Vestas Investment Management. Were you mandated for this specific target or was it a target that you identified for the final buyers? 

Alistair: This was an opportunity we identified, which matched our investor’s requirements. We were fortunate to be able to agree on an “off-market” transaction with the vendor.

CEELM: What made the Leroy Merlin distribution center a particularly attractive target?

Alistair: The target afforded us the opportunity to deliver a long-term, secure income in a location of strategic importance to the occupier. Furthermore we know the strength of the DIY market in Poland, which helped us underwrite the fundamentals of this transaction from a real estate and operator perspective.

CEELM: What would you say was the most complex aspect of the transaction?

Alistair: There were some tax and structuring aspects to overcome but the most complex elements to agree upon in the documentation were the “what if” scenarios, since this was a forward commitment to acquire the asset once construction had concluded.

CEELM: Why did you choose to use Dentons as legal advisors on this deal?

Alistair: We have a long-standing relationship with Dentons in Poland and across Europe, which we were keen to continue in this transaction. We always find that Dentons acts with the highest level of diligence and professionalism, which will result in our relationship continuing for the years ahead.

White & Case has advised Kenbourne Invest II and Tollerton Investments Limited on the PLN 700 million sale of shares in Play Communications. BofA Securities and Santander Bank Polska S.A. – Santander Biuro Maklerskie acted as joint global coordinators and joint bookrunners.

According to White & Case, “the sale was carried out on May 20, 2020, via an accelerated book-building process. Kenbourne and Tollerton, which respectively held 25.42% and 24.66% of Play’s shares, sold 25,000,000 ordinary shares which, due to strong market demand, was an increase in the originally planned sale of 18,000,000 shares. The offer was directed exclusively to qualified institutional investors in the USA and Europe.”

White & Case’s team in Warsaw was led by Local Partner Rafal Kaminski and included Partner Marcin Studniarek and Associate Monika Duzynska.

DWF has advised Solaque Holding Ltd. on the sale of two wind farms in Poland to Fonnes sp. z o.o., a subsidiary of Taaleri Plc. Clifford Chance reportedly advised the buyers on the deal.

According to DWF, “Solaque Holding, a company registered in Cyprus, is affiliated with the GEO Renewables Group, operating in the renewable energy sector. GEO Renewables has been operating since 2010, and has already completed several dozen projects, mainly in wind and solar energy, whose total value exceeded PLN 2 billion.”

DWF’s team included Partners Karol Lasocki and Rafal Wozniak and Senior Associate Magdalena Trzepizur.

Act BSWW has advised AFI Europe on a lease of 900 square meters of office space in the V.Offices complex in Krakow to BrainShare IT. 

According to act BSWW, “V.Offices is offering office space of over 21,400 square meters. Conveniently located, it has easy access to public transport. The office building is ecologically oriented. At the design stage, V.Offices was awarded BREEAM Outstanding and won the award for the most eco-friendly building in CEE at the BREEAM gala in London.”

Act BSWW’s team was led by Senior Associate Izabela Zmijewska.

Act BSWW did not reply to our inquiry on the matter.

The new Covid-19 Act still forces businesses to file registry applications and pleadings in paper form with handwritten signatures, using a universal postal service provider.

Moreover, suspended time limits for procedures and actions will once again come back into force. Importantly, some changes are being made to the rules regarding open hearings, and for the first time in Polish history, parties to the proceedings will not be required to be physically present in the court building.

The government initial proposal included provisions for filing court pleadings via the Electronic Platform of Public Administration Services (ePUAP), and the use of ePUAP, the general courts’ information portal, or e-mail to make deliveries if the party to the proceedings has consented to it. However, the final version of the Covid-19 Act did not offer solutions that could streamline the process of filing court pleadings while the epidemic situation persists.

One of the most important changes is that the time limits which were suspended when the Covid-19 Act entered into force will once again return and the clock will continue to run after seven days from the day on which the new Covid-19 Act enters into force (the day after its official publication). Therefore, businesses should prepare to undertake any legal actions that were postponed due to time limits being suspended.

To safeguard people participating in court proceedings some changes have been made to the rules regarding open hearings. These new measures will apply to all civil proceedings during the epidemic situation and for a year after it ends:

• open hearings can be conducted via videoconference unless conducting a standard open hearing will not pose excessive risk to the people attending;
• a judge may order a closed hearing when:
  • it is necessary to hear the case;
  • conducting an open hearing could pose excessive risk to the people attending;
  • the open hearing cannot be conducted via videoconference;
  • none of the parties appeal such an order after 7 days from it being delivered;
• the president of the court may order some members of the adjudicating panel to participate in the hearing via electronic means, unless this is the final hearing;
• when evidence is considered, the court may decide to finish the case and issue a ruling during a closed hearing after receiving the final statements;
• the second instance court may decide to conduct only a closed hearing, unless a party files a motion to conduct an open hearing or to consider evidence which cannot be disregarded.

Changes have also been introduced to administrative proceedings:

• the Supreme Administrative Court may rule cassation during a closed hearing with the consent of all parties;
• regional administrative courts and the Supreme Administrative Court can conduct open hearings via videoconference, unless conducting a standard open hearing does not pose excessive risk to the people attending;
• the judge may order a closed hearing when:
  • it is necessary to hear the case;
  • when conducting an open hearing could pose an excessive risk to the people attending;
  • when an open hearing cannot be conducted via videoconference.

Currently, it is unknown which tools will be used to conduct hearings online or when they will become available. This shall be specified by resolution of the Minster of Justice at a later date. It is also important to highlight that such a solution will need to make non-confidential open hearings open to the public.

By Marzanna Sobaniec, Partner, and Jakub Kulicki, Junior Associate, Penteris

Dentons has advised Patrizia Frankfurt Kapitalverwaltungsgesellschaft, a German entity managing real estate investment funds in Europe, on the sale of the Mlodziejowski Palace in Warsaw to Midolux 2 SA. Linklaters advised Midolux 2 SA – a subsidiary of Lebanon’s FFA Real Estate – on the deal.

According to Dentons, “the Mlodziejowski Palace, also known as M10 building, was built in the second half of the 17th century. Thoroughly revitalized and modernized, the building offers 6,900 square meters of leasable office space of the highest standards with simultaneous preservation of unique virtues of this historic building.”

Dentons’ team included Partner Bartlomiej Kordeczka, Senior Associate Hanna Zarska, and Associate Anna Misztela.

Linklaters’ team in Warsaw included Partner Janusz Dzianachowski, Managing Associates Adriana Andrzejewska and Marta Domino, Senior Associate Jedrzej Palka, and Associates Mateusz Cieslak and Maciej Checinski. Managing Associate Przemyslaw Lipin led the firm’s team in Frankfurt.

Bird & Bird has successfully won the right to advise the Solidarity Transport Hub on its selection of key consultants for a new airport in Poland.

According to Bird & Bird, “the Solidarity Transport Hub is a planned transfer hub in the center of Poland which will integrate air, rail, and road transport. The development envisages the construction of an airport located 37 kilometers west of Warsaw and covering an area of 3,000 hectares. The new airport will initially be able to handle up to 45 million passengers per year, with the potential for this to increase to up to 100 million. The investment should create over 150,000 new jobs.”

The Bird & Bird team will be led by London-based Partner Stuart Cairns and will include, in Warsaw Partner Tomasz Zalewski and Counsel Magdalena Zablocka-Foulkes, and in London, Partner Marco Nicolai and Senior Associate Chris Murray.

Gessel has advised Systexan SARL, a fund managed by Enterprise Investors, on its exit from X-Trade Brokers Dom Maklerski S.A., including its conducting a public offer in the form of accelerated book-building worth PLN 111.2 million. Global coordinators were PKO BP and Ipopema Securities.

Enterprise Investors is a private equity company in Central and Eastern Europe that has been operating since 1990 and created nine funds with a total capital exceeding EUR 2.5 billion. These funds have invested almost EUR 2 billion in 143 companies from various sectors.

Warsaw-based X-Trade Brokers Dom Maklerski S.A. is the longest acting forex broker on the Polish market. Since its creation in 2002, it has been present in 17 countries and was listed on the WSE in 2016. The broker is regulated by KNF, FCA, BaFin and CMB.

Gessel’s team included Partner Krzysztof Marczuk and Managing Associate Magdalena Szeplik.

Allen & Overy has advised the Polish Development Fund on the implementation of Poland’s “PFR Financial Shield for Small and Medium-Sized Enterprises” program that is designed to provide financial support for enterprises following the outbreak of the COVID-19 coronavirus pandemic.

Allen & Overy’s team was managed by Partners Tomasz Kawczynski, Piotr Lesinski, Malgorzata Dobrzynska-Dabska, and Marta Sendrowicz and Senior Lawyer Jerzy Zdrojewski, and included Counsel Lukasz Walczyna, Senior Lawyers Justyna Ostrowska, Maciej Dymnicki and Marek Neumann, and Lawyers Aleksandra Kloczko and Weronika Groskrejc.