Category: Russia

Egorov Puginsky Afanasiev & Partners has announced that it has worked closely with Macfarlanes in that firm’s successful representation of Russian metal giant Rusal’s claim against the London Metal Exchange at the English High Court of Justice over new rules governing metals warehouses.

Mr. Justice Philips agreed with Rusal’s contention that the LME improperly failed to consult over alternatives to a new rule it imposed regarding the amount of metal a company can “load-in” and “load-out” of a warehouse, which could be expected to result in a fall in the price of aluminum. Despite finding for Rusal, Justice Phillips rejected the company’s claim that the LME had been biased in the way it consulted and implemented the new rule.

Rusal CEO Oleg Deripaska said of the ruling that: “We welcome this decision by the High Court and look forward to working closely with the LME, and indeed all key stakeholders, to ensure that the revised consultation period and subsequent rule changes serve to increase the integrity of price discovery and transparency across the market, which we believe are the key issues continuing to face the sector.”

For its part, the LME issued a statement expressing its disappointment in the decision, but announcing that the disputed rule would not be implemented on April 1 as planned, although other new rules affecting metals warehouses would come into effect on that date. It also indicated that it was consulting and considering the possibility of “appeal or re-consultation.”

EPAM Chairman Dimity Afanasiev and Partner Robin Wittering provided assistance to Macfarlanes Partners Simon Nurney and Senior Counsel James Popperwell. Bryan Cave Partner Paul Hauser advised Rusal as well.

Magnusson has announced it has opened an office in St. Petersburg together with Russian firm Kachkin & Partners. The office launch will be effective as of April 4, 2014.

Magnusson has been present in Russia since 2005 with an office in Moscow. Kachkin & Partners was established in St. Petersburg in 2001. Its team consists of 22 lawyers, including 3 partners, and its main practice areas are real estate, construction, corporate, M&A, PPP, IP/IT, dispute resolution and arbitration. 

Denis Kachkin, founder and Managing Partner of Kachkin & Partners commented: “Together with Magnusson we gain access to a broad international network and are better positioned to attract cross-border work. We very much look forward to working jointly with our colleagues in Moscow and in all other offices of the firm.”

Berwin Leighton Paisner (BLP) has announced that Corporate lawyer Matvey Kaploukhiy is one of eight Senior Associates promoted to Partner, effective as of May 1, 2014.

Kaploukhiy is a member of the Corporate/Merger & Acquisition practice of Goltsblat BLP, the firm’s Moscow arm, where he focuses on Corporate/M&A transactions, Private Equity, and Corporate Restructuring projects. He has additional experience with Real Estate transactions, and advising on Corporate and Anti-trust legislation issues. 

BLP also announced the promotions of 6 Senior Associates to Partner in the firm’s London office and one in the firm’s Hong Kong office.

Capital Legal Services has opened an office in Helsinki, making it the first Russian law firm to do so.

The Helsinki office is located at Aleksanterinkatu 48 in the Finnish capital, and will provide on the ground assistance to the firm’s large portfolio of Finnish clients coming into Russia.

Vladislav Zabrodin, the Managing Partner of Capital Legal Services, is enthusiastic. “This is an exciting moment for us. Finland is a key market and an important area for growth. We pride ourselves on innovation and are delighted to be the first ones on the ground. We are driven by the idea of becoming closer to our clients and help them to be successful on the Russian market. Russia is not considered to be a simple market but we strongly believe that this experience can be very successful and this is confirmed by the experience of our existing clients. We also believe that this international integration will be beneficial for all countries and parties involved.”

Finnish lawyer Eero Mora has joined the firm as well to work out of the Helsinki office. Mora was for many years the General Counsel for Alma Media in Finland and Chairman of the Finnish Industrial Lawyers Association. He said of the move that: “the mission of Capital Legal Service is to build a bridge over the troubled border between Russia and Finland and to open new horizons for the Finnish companies that are still hesitant to cross it.  The Helsinki office will provide a significant level of comfort for Finnish enterprises coming over the border. I am really proud to be able to work together with very talented, motivated and goal oriented lawyers of Capital Legal Services.”

Baker & McKenzie announced the completion of several “innovative” securitizations over the last few months, as both transaction and tax counsel, and involving banks raising more than RUB 70 billion in investor funding.

The firm described the transactions as “a record amount in the Russian securitization market for such a short period,” and calculated that the transactions accounted for more than 80 percent of all the securitizations in Russia over the last nine months. Baker & McKenzie acted as both deal (transaction) counsel and tax counsel on these deals.

In December 2013, Baker & McKenzie’s team completed a RUB 28 billion domestic mortgage securitization for Bank VTB24, which the firm described as “the largest public mortgage securitization ever undertaken in the Russian securitization market.”  According to Baker & McKenzie, “the transaction structure allowed the volume of the junior tranche to be decreased, thus increasing the amount of funds raised through the senior tranche. The issued bonds were rated Baa2 by Moody’s. The bonds were placed at a fixed rate of 7.9 percent p.a. and are eligible for repurchase transactions with the Russian Central Bank.”

Also in December 2013, the firm’s securitization team completed a debut deal for Transcapitalbank. The deal was placed under the second Agency for Housing Mortgage Lending (AHML) program for the purchase of mortgage-backed bonds. The transaction involved an innovative mortgage risk insurance mechanism for the underlying collateral. The insurance was provided by AHML.  According to the firm, “this mechanism allowed the originator to achieve better subordination (90 percent — senior tranche, 10 percent — junior tranche), which is the lowest subordination on a Russian securitization so far. The issued bonds were rated Baa3 by Moody’s, which is four notches higher than the rating of the originator. The bonds were placed with AHML and a number of private investors allowing the originator to receive financing at the fixed rate of 8 percent p.a.”

In November and December 2013, Investtradebank and Absolut Bank completed repeat mortgage securitizations. The Investtradebank deal was placed under the AHML program for the purchase of mortgage-backed bonds, enabling the bank to receive long-term financing at a fixed rate of 9 percent p.a. Absolut Bank securitized its RUB 9 billion mortgage portfolio and all the issued bonds were placed among market investors at a fixed rate of 8.9 percent p.a. The bonds were rated Baa3 by Moody’s. This is the second successful market placement of mortgage bonds by Absolut Bank.

Also in December, 2013, Baker & McKenzie advised AHML in connection with the first ever multi-originator mortgage securitization. The transaction envisaged the issue of five tranches of bonds, including a mezzanine tranche. Both senior and mezzanine tranches were placed at fixed rates (8.75 percent p.a. and 11 percent p.a., respectively). The structure of the transactions allowed consolidation of the mortgage portfolios of several regional partner mortgage agencies of AHML and enabled capital markets financing to be obtained on favorable conditions. Under the transaction, each originator purchased a junior tranche, the size of which varied depending on the size of the mortgage portfolio of each originator.

In yet another December 2013 transaction, Baker & McKenzie successfully closed the first post-crisis cross-border securitization of consumer loans in Russia. The transaction was arranged by the London branch of Deutsche Bank and included loans originated by the Poidemi Commercial Bank (a member of the Russian “Life” financial group). The structure allowed the bank to raise three-year funding at a favorable interest rate.

In January 2014, Baker & McKenzie’s team completed a RUB 10 billion commercial true sale mortgage securitization. The bonds were issued by the Kama Mortgage agent. The notes were placed with a number of private investors at a fixed rate of 10.9 percent p.a.

Vladimir Dragunov, Moscow Partner and head of the Russian Structured Finance Practice at Baker & McKenzie, issued a statement commenting on the multiple transactions: “We are very proud that our clients have completed such complex and innovative transactions. Each of these deals has its own unique features. The experience and commitment of our team made it possible to successfully implement these transactions in a remarkably short timeframe.”

Egorov Puginsky Afanasiev & Partners (EPAM) has announced that former Liniya Prava Managing Partner Dmitriy Glazounov and his team have agreed to join the firm. Glazounov will head EPAM’s Moscow Banking & Finance and Capital Markets practices.

Before joining Liniya Prava Glazounov held senior positions with Russia’s Federal Commission for the Securities Market and the Agency for Housing Mortgage Lending. He is the only lawyer on the Bank of Russia’s Expert Board on Development of the Bonds and Debt Instruments Market — a working group responsible for developing legislation for the Russian financial market.

According to a statement released by EPAM, Glazounov’s team “boasts unique experience in providing legal support for complex financial transactions (securitization and project finance), issuing tailored financial products (mortgage participation certificates, foreign-issued securities placed in the Russian Federation and foreign currency bonds), advising on corporate restructuring and debt restructuring, and participating in major projects related to securities issues, company entries onto the IPO market, and corporate law matters.”

Glazounov’s clients include BNP Paribas, Morgan Stanley, Citibank, Petrocommerce Bank, VTB Capital, Renaissance Capital, VEB Capital, Uralsib Capital; Soyuz Bank, Tatfondbank, MGTS, Federal Freight, ZENITH Bank, Miratorg Agro-Industrial Holding, Orgsyntez Group CJSC (Renova Group), and others.

“Egorov Puginsky Afanasiev & Partners is the biggest player on the Russian legal market, boasting an impressive representative list of clients and unique expertise in various practice areas. The synergy we anticipate from combining these factors and the unique experience my team and I have gained at Liniya Prava can create a platform for the strongest Banking & Finance and Capital Markets Practice on the Russian market”, said Glazounov.

Dmitriy Afanasiev, EPAM Chairman, released a statement announcing that “We sincerely welcome Dmitry’s decision to join the firm. I am confident that his unique status as a true market leader in the field of Finance and Capital Markets, combined with his team’s vast experience, will help us make a giant leap in developing the Firm’s Moscow-based Banking & Finance and Capital Markets Practice.”

Lidings has acted as legal advisor for BILLA retail chain in the expansion of its retail chain in Moscow.

Lidings Real Estate and Construction practice lawyers conducted due diligence of the deal on the anticipated acquisition by BILLA Realty of a non-residential building located on the north-west side of the capital to set up a retail grocery store.

“As part of due diligence, identifying the main risks and conducting their assessment allowed us to offer the client an optimal scheme to complete the deal in a safe and timely manner,” commented Lidings Counsel Vadim Konyushkevich. “Considering BILLA’s business expansion strategy on the Russian market we would be delighted to continue cooperation and offer our expertise obtained  through involvement in numerous high-profile privatization and acquisition projects on the territory of Russia,” Konyushkevich added.

The BILLA supermarket chain has been present in Russia since 2004, and it is expected that over 100 supermarkets will be operating around the country by the end of 2014. 

Dentons announced that Sergey Trakhtenberg, a Partner in the firm’s Moscow office, has been appointed head of the Russian Real Estate / Construction Practice.

Trakhtenberg has extensive experience in cross-border M&A, joint ventures and finance transactions, primarily in the real estate sector.

According to Dentons, Trakhtenberg has acted as lead lawyer in a wide range of transactions, including share and asset sales and acquisitions, investment in existing or future property, construction, secured and unsecured lending (both on the lender and borrower side), workouts and restructurings of defaulted loans, and others. He has significant experience in structuring and implementing these transactions and drafting and negotiating a full range of related transaction documentation (including English-law documents). He has also conducted numerous full and limited-scope due diligence reviews and coordinated due diligence exercises by offshore counsel on cross-border transactions.

Florian Schneider, Managing Partner of Dentons’ Moscow office, said that “Sergei has led teams of lawyers on the most complex and large-scale projects in the Russian real estate market. He will be responsible for strategy to further develop Dentons’ Real Estate and Construction practice in Russia and the CIS.”

Lidings has provided legal support to the China Development Bank in granting a special purpose loan to the Russian state-owned Vnesheconombank for the financing of the construction of a large multifunctional complex in Moscow. 

The complex will be located on the territory of the former “Slava” clocks factory near Moscow’s Belorusskiy Vokzal train station. The project involved joint input from Lidings Banking/Finance and Corporate/M&A practice groups.

The team, led by Lidings Counsel Vadim Konyushkevich, provided legal support on the loan to Vnesheconombank, as well as advice on issues of internal coordination by the Russian bank, the regulations of the intended use of the loan facilities, requirements of Russian foreign currency control, and the applicability to the deal of the double tax treaty. 

Squire Sanders has advised one of the shareholders of Lenta on the sale of its shares, as part of Lenta’s USD 4.3 billion IPO and GDR listing on the Main Market of the London Stock Exchange and the Moscow Exchange (including a USD 952 million secondary offering).

Lenta is the second largest hypermarket chain in Russia, with 77 stores across the country. “The IPO reflects increasing investment interest in the Russian retail and consumer sectors”, commented Squire Sanders Partner David Wack, “and we expect to see more of such activity as the trend continues.”

The team was led by Wack and Capital Markets Partner Giles Distin.