Category: Russia

The London, Moscow, and New York offices of Debevoise & Plimpton LLP have advised longstanding client NLMK on a new USD 700 million, 7-year Eurobond offering, with an annual coupon rate of 4.5%. Linklaters advised Joint Lead Managers Deutsche Bank AG, London Branch, ING Bank N.V., London Branch, J.P. Morgan Securities plc, and Societe Generale.

The 4.5% Loan Participation Notes due 2023 were issued by Steel Funding Limited, an Irish company formed for the purpose of issuing the Notes.

The proceeds from the offering will be used to finance the purchase of existing notes due 2018 and 2019, as well as for NLMK’s general corporate purposes and refinancing of its current debt.  Debevoise is also advising NLMK on the related tender offer for the outstanding 2018 and 2019 notes, which is expected to complete on June 17, 2016.

According to Debevoise, “the order book indicated a high level of demand from a broad range of international investors, including investors in the Europe, the U.S. and Russia, as well as various regions in Asia.”

Debevoise describes the NLMK Group as “a vertically integrated steelmaking company, the largest in Russia, and one of the most efficient in the world.” NLMK’s production assets are located in Russia, Europe, and the United States. The Company’s steel processing capacity is over 17 million tonnes per year, of which about 16 million tonnes are produced in Russia.

Debevoise had previously advised NLMK on the existing notes due 2018 and 2019.

The Debevoise team advising NLMK was led by London Partner James Scoville and included London Partner Alan Davies and Moscow International Counsel Dmitry Karamyslov and Maxim Kuleshov. Moscow Associates Timur Ochkhaev, Elena Klutchareva, and Marina Abazyan also worked on the matter. Tax advice was provided by New York Partner Burt Rosen, London International Counsel Cecile Beurrier, and London Associate Patrick Fasoro. 

Linklaters did not reply to our inquiry about its team on the matter.

Liniya Prava has provided legal counsel to LLC Transport Concession Company (“TCC”) on the concession agreement it entered into on May 30th with the Government of St. Petersburg for the creation and reconstruction of a tramway network in the Krasnogvardeiskiy district of St. Petersburg. The CJSC Leader pension fund asset management company is the financial arranger of the concession.

The LLC Transportation Concession Company, a consortium established by the LSR Group and the Management Company Leader, was the only participant of the concession tender. The expected duration of the concession agreement is 30 years. The works are planned to be finished by mid-2018. The concessionary’s investment in the project will exceed RUB 8.9 billion (at 2015 prices). At the investment stage St. Petersburg will ensure financing in the amount of RUB 1.33 billion.

The project is expected to include the construction of new tramway tracks in all the major streets of the Krasnogvardeiskiy district up to the Ladozhskiy train station, as well as the building of a tramway depot for servicing and layover of the rolling stock and the creation of platforms designed for facilitating quick entrance and exits by passengers on the trains.

According to Liniya Prava, the legal support it provided included “counseling TCC at the preparation stage for participation in the tender procedures, drafting propositions relating to concession agreement terms, and support of tender procedures.”

“This is the first project in Russia involving the construction of an all-inclusive transportation system in an entire district,” commented Sergey Okutin, the Head of TCC. “We are going to carry out a complete reconstruction and raise the quality of public transportation services for those who live in the Krasnogvardeiskiy district. The tramway tracks will be made using a new noiseless technology and the trams will be able to accommodate more passengers. Overall, we expect to seriously improve transport accessibility of the Ladozhskiy train station and decrease the burden of other means of transportation.”

Liniya Prava Managing Partner Andrey Novakovskiy commented on the signing of the concession agreement: “This project can very well be described as innovative. For the first time in Russia a concession tender has been held in the area of urban above-ground electrical transportation which will lead to the creation of district tramway communication in a city of federal importance. We are glad to play a part in development of the St. Petersburg transportation system.”

The London and Moscow offices of Debevoise & Plimpton have advised longstanding client NLMK Group on a 4-year pre-export finance facility for a total of USD 400 million. The banks arranging and bookrunning the facility were advised by Hogan Lovells. 

The company plans to use the proceeds to refinance its short-term debt, as well as for general corporate purposes. Societe Generale was appointed Coordinator, Mandated Lead Arranger and Bookrunner for the facility. ING Bank N.V., Nordea Bank AB, PJSC ROSBANK, UniCredit Bank Austria AG, acted as Mandated Lead Arrangers and Bookrunners. Deutsche Bank AG, Natixis, and Bank of America Merrill Lynch acted as Lead Arrangers; China Construction Bank and Bank ICBC acted as Arrangers. Deutsche Bank AG was appointed as Facility Agent and ING Bank N.V. as Security Agent. 

NLMK Group is the largest steelmaker in Russia and — according to Debevoise — one of the most efficient in the world. The company’s metal products are used in various industries, from construction and engineering to the manufacture of power-generating equipment and offshore wind turbines.  

The Debevoise team advising NLMK Group was led by London-based Partner Alan Davies, and included Associates Dmitry Karamyslov and Elena Bader. Tax advice was provided by London-based Partner Richard Ward, assisted by Associate Patrick Fasoro.  

White & Case has advised Naspers Limited, the South African-based global Internet and media company, on its USD 1.2 billion investment in Avito, the leading online classifieds platform in Russia. Naspers is buying shares from existing shareholders to increase its stake in the Swedish holding company Avito AB from 17.4 percent to 67.9 percent on a fully diluted basis. Ashurst advised Avito on the matter.

Naspers is a broad-based multinational Internet and media group offering services in more than 130 countries. Its principal operations are in ecommerce, video entertainment, and print media. White & Case also advised Naspers during 2013 on its initial investment in Avito. Avito has since expanded successfully into classified verticals and, according to White & Case, it “is now a leading player in five key verticals: general goods, auto, real estate, jobs and services.

Since 2013, Avito has become one of the top ten websites by traffic in Russia with around 35 million unique monthly visitors and 8.6 billion monthly page views. In 2014, the company reported revenues of USD 76.5 million (up 76 percent year-on-year) and an EBITDA margin of 50.6 percent.

White & Case Partner Eric Michailov, who led the firm’s deal team, said: “This deal clearly demonstrates that the Russian market is still very attractive for foreign investors, especially in such a rapidly changing sector such as technology, media & telecommunications.” According to data from Mergermarket, the investment is the second largest private transaction by value this year with a Swedish target company.

The White & Case team was led by Michailov, with support from Moscow based Local Partner Anastasia Putilova and Associates Ksenia Tyunik, Ekaterina Palagina, and Ekaterina Tulaeva. The firm’s Stockholm team was led by Partner Johan Steen with support from Associates Christian Holmberg, John Gustafsson, and Hanna Wingren.

The London and Moscow offices of Debevoise & Plimpton are advising longstanding firm client Norilsk Nickel on a new USD 1 billion 7-year Eurobond offering, with an annual coupon rate of 6.625%.

This is the first benchmark-sized Eurobond by a Russian issuer in 2015 and the largest such issuance since 2014. The offering included a tranche offered to qualified investors in the United States pursuant to the Rule 144A exemption.  

Debevoise has previously advised Norilsk Nickel on a number of similar finance and capital market matters, including in 2013 on separate Eurobond offerings of USD 1 billion and USD 750 million.  

The Debevoise team advising on the latest issuance by Norilsk Nickel was led by London Partner James Scoville and included Moscow Partner Alan Kartashkin, London Partner Alan Davies, International Counsel Cecile Beurrier, and Associates Patrick Fasoro, Dmitry Karamyslov, Maxim Kuleshov, Timur Ochkhaev, and Svetlana Panfilova.  

Image Source: nornik.ru

The Competition Practice team of Egorov Puginsky Afanasiev & Partners successfully defended the interests of Yandex — Russia’s largest IT company — against Google, in the former’s claim that the latter had abused the market in relation to pre-installed app stores for devices on the Android operating system.

In February 2015, Yandex appealed to the Federal Antimonopoly Service of Russia (FAS Russia) with complaints that Google had violated the Russian antimonopoly legislation. According to Yandex, Google’s actions led to manufacturers’ failure to pre-install apps from developers other than Google on mobile devices with the Android operation system. Thus Google limited the competition in terms of mobile applications for Android devices.

On September 18, 2015, FAS Russia ruled that Google had indeed infringed upon the country’s antitrust laws by abusing its dominant position, and required the company to make changes in all existing agreements and treaties that contain any requirements for pre-installation of Google apps by November, 18, 2015.

In addition, FAS Russia ordered Google to notify users about the option of de-activating the preinstalled Google apps, the option to change the default search engine in Google Chrome browser, the option to install a different search widget or other apps similar to those within the Google package, and the option to rearrange the positon of app icons on their devices.

According to EPAM, “this outcome is of great importance for the market. At its core, the FAS decision establishes fair rules of the game, ensuring free competition between developers, whose applications and services compete with Google products, as well as helping to protect the interests of the mobile app manufacturers and direct users.”

The EPAM team was supervised by Partner and Head of Competition Practice Natalia Korosteleva, and included Counsels Evgeny Bolshakov and Denis Gavrilov, Associates Oxana Akhmedova and Grigory Shafeev, and Junior Associate Igor Gavrilov.

Korosteleva declared the decision by FAS Russia “certainly a milestone.” She continued: “We are talking about the largest world player using global anti-competitive practices aimed at excluding its competitors. The FAS decision and improvement notice look balanced and reasonable. It is known that a similar investigation against Google is now underway in Europe. Hopefully, the FAS conclusions will be also reflected in the European Commission’s decision.”

Norton Rose Fulbright is advising Sacturino Limited — controlled by Said Kerimov, the son of billionaire Suleiman Kerimov — on its offer of USD 2.97 per share for the 59.8% share capital of Polyus Gold International that it or its parent Wandle Holdings Limited does not already own or have an interest in. Debevoise & Plimpton is advising Sacturino on financing aspects for its offer, which include a USD 5.49 billion facility arranged by VTB Bank — which was advised by Allen & Overy.

The offer values Polyus Gold at approximately USD 9 billion, and represents a premium of approximately 2% to the closing price per Polyus Gold share on September 2, 2015.

Polyus Gold — publicly listed on the LSE — is the largest gold producer in Russia and one of the top 10 gold miners globally by ounces produced, with 1.696 million ounces of gold output in 2014. Polyus Gold holds one of the largest gold reserves in the world, with 65.8 million ounces of proven and probable gold reserves, according to JORC standards, as at 31 December 2014.

The Norton Rose Fulbright team in London is led by Partners Chris Pearson and Paul Whitelock, supported by Corporate Partner Simon FT Cox and Corporate Associates Ed Gardner, Christopher McCarthy, Nicolas Sirtoli, Rickard Lillestierna, and Ksenia Bourne. The firm’s team also includes Banking Partner Rich Hughes and Senior Associate Neha Khosla. The firm’s Moscow team is led by Partners Julian Traill and Alexander Tsakeov. 

Partner Pierre Maugue leads Debevoise’s London-based team, which includes International Counsel Nathan Parker and Associate Tom Smith. Nik Kutnaks leads the firm’s Moscow-based team.

The A&O team advising VTB Bank was led by Banking Partner Sanjeev Dhuna, with support from Senior Associates Joydeep Choudhuri and Amanda Dent and Associates Hannah Gates and Fiona Yeung. Corporate advice was provided by Partner Richard Hough and Associates Sarah Thomas and Alex Tilley. Tax advice was provided by Partner Chris Harrison and Senior Associate Ben Brown. 

Image Source: polyusgold.com