The South East Legal Alliance (SELA) has announced that Slovenian firm Kirm Perpar has joined it.
SELA now has members in Macedonia (Apostolska & Aleksandrovski), Serbia/Montenegro (Bojovic & Partner), Bosnia & Herzegovina (Dimitrijevic & Partners), Croatia (Zuric i Partner), and now Slovenia (Kirm Perpar).
Selih & Partnerji, working alongside lead counsel Clifford Chance, has advised a group of Asian investors represented by United Luck Group Holdings Limited (led by Chinese businessman Ou Yaping), on their USD 1 billion acquisition of Outfit7 Investments Ltd., the app producing company established by Slovenians Iza and Samo Login, which is best known for its globally successful app Talking Tom and Friends. Taylor Wessing advised the sellers on the deal.
Founded in 2009 and based in Cyprus with operations in Slovenia, the UK, and China, Outfit7 boasts over five billion app downloads. It generated EUR 108 million in group revenue in 2015 (up from EUR 79 million in 2014) and EUR 80 million in net profit (up from EUR 60 million in 2014) and paid out EUR 74 million in dividends.
According to media reports, the USD 1 billion price tag makes this the single biggest transaction ever for a Slovenian company or a company founded by Slovenians.
The Selih & Partnerji team was led by Partners Natasa Pipan Nahtigal and Tilen Terlep.
The London-based Taylor Wessing team was led by Corporate Technology Partner Mike Turner, supported by Associates Adam Griffiths and Katie Kaplucha.
Editor’s Note: After this article was published CEE Legal Matters learned that Zhejiang Jinke Entertainment, a chemicals and TMT company in China listed on the Shenzhen Stock Exchange, was engaged in the acquisition with United Luck, and subsequently entered into an exclusive framework agreement with United Luck to acquire 100% of the shares of Outfit7.
In addition, CEE Legal Matters learned that Clifford Chance’s team was led by China Co-Managing Partner Terence Foo, supported by Counsel Hong Zhang and Associates Bernard Cheng and Ethan Ying. Partner Timothy Democratis and Associate Lingyin Xu advised on the debt financing. The firm’s China team was supported by a London-based team including Global Head of Media Partner Daniel Sandelson and Employment Partner Sonia Gilbert, Senior Associates Brian Harley, Leigh Smith, Anna Blest, and Becky Moore, and Associates Mark Comber and James Jeffries-Chung.
Foo commented that: “We are delighted to have advised on this significant acquisition in the TMT sector, which has seen a number of high profile transactions involving Chinese buyers, and to successfully close this deal despite the recent tightening up of capital outflows in China.”
Image Source: outfit7.com
CEE Equity Partners, the Investment Advisor to the China Central and Eastern Europe Investment Co-operation Fund, has announced the completion of an investment by the Fund in Javna Razsvetljava d.d. and JRS d.d., which it describes as “market leaders in design and implementation of public lighting and signaling solutions, including Energy Service Company-based contracting, in Slovenia.”
Wolf Theiss advised CEE Equity Partners on the deal, with a Slovenia-based team led by Partners Markus Bruckmuller and Klara Miletic, supported by Associates Anze Pavsek, Petra Jermol, and Larisa Primozic.
MPRR represented the seller, an unidentified Cyprus entity.
No other information about the deal was provided.
Editor’s Note: After this article was published, MPRR informed CEE Legal Matters that its team included Partner Vladimir Mamic and Attorney-at-Law Nikola Kokot.
Contrary to initial negative expectations, the post-Brexit shockwaves hardly brushed upon the Slovenian capital markets, which seem to be slowly gaining momentum.
Forecasts for moderate upward trends may partly be linked with the latest report of the Institute of Macroeconomic Analysis and Development (IMAD), which raised the GDP growth anticipations for 2016 from 1.7% to 2.3%, keeping them at a rather steady level of 2.9% and 2.6% for 2017 and 2018, respectively. According to IMAD, the favorable GDP growth prognosis revolves around increased exports and domestic consumption. The buzz surrounding two of the major blue chips listed on the prime market of the Ljubljana Stock Exchange (LJSE) is therefore of little surprise. Petrol d.d. – a major regional oil and derivatives distributor – and Gorenje d.d. – one of the leading European home appliance manufacturers – have in the past two quarters recorded an increased share value of 9% and 8.3% respectively. The reduced yield of the Slovenian 10-year bonds, currently at a yearly low of 0.72%, mirrors the conservatively optimistic IMAD forecast.
Having seen the securities turnover decrease annually (totaling EUR 20.3 million in August 2016), LJSE has also recorded an increase in the number of transactions from 3,421 to 4,144 compared to the same period the previous year. The market capitalization of securities has increased from EUR 24.28 billion to 25.57 billion, and the nominal return for the Slovene Blue Chip Index (“SBI TOP”) rose from -7.62% to 0.12% in the same period. Accordingly, the value of SBI TOP, indicating the weighted general performance of blue chip shares on LJSE, rose to 745.58 points in September 2016, its highest value since 2010. The trade of shares (Prime, Standard, and Entry Market), amounting to EUR 195.21 million in value, represents the predominant volume of LJSE-related transactions in 2016 thus far. The value of bond-related trade in the same period amounts to EUR 22.84 million, though no significant interest has been recorded regarding trade of treasury bills and commercial papers.
Unsurprisingly, due to the ongoing privatization process, the major transactions have been inextricably linked with the State-owned Slovenian Sovereign Holding (SSH) and Bank Assets Management Company (BAMC). Moreover, despite the apparent signs of recovery of the LJSE market, some of the major single deals struck in 2016 include non-listed companies as well. Transactions worth mentioning in this group include the sale of 100% of shares of AHA EMMI d.o.o. by BAMC to Aluform, a subsidiary of the Polish Grupa Kety S.A., for a total value of EUR 2.5 million (ODI advised the purchaser in the transaction). Topping the transaction value chart of 2016 is the acquisition of 100% of shares of the second largest Slovenian bank Nova KBM d.d. by Apollo Global Management, LLC and the European Bank for Reconstruction and Development for a total price of EUR 250 million.
As far as announced deals are concerned, the envisaged IPO of the largest Slovenian bank, NLB, d.d., qualifies as the undisputed blockbuster. According to SSH the preparatory activities are well underway, with the recently amended 2020 NLB Group Strategy believed to be the cornerstone of the bank’s aimed performance and competitiveness improvement. SSH aims to conclude the sale of the bank, subject to a bail-in in 2013 on which the Slovenian Constitutional Court is to decide in the coming months, by the end of 2017. Other anticipated or ongoing transactions led by SSH and BAMC include, inter alia, the automotive parts producers Cimos d.d. and Unior d.d., the foundry Mariborska Livarna Maribor, d.d., and the hygienic tissues producer Paloma d.d.
Lastly, it is also worth noting that according to the provisions of Article 48 of the new Book Entry Securities Act, adopted to enable the implementation of the Target2-Securities settlement platform, all current securities registry accounts at the Central Securities Clearing Corporation (CSCC) are to be terminated on September 30 for legal entities and on January 1, 2017, for natural persons. The securities must be transferred from the registry to an account opened with one of the CSCC members in order to avoid a compulsory transfer of the securities to a deposit-in-court account.
Selih & Partnerji is reporting that it advised Slovenia’s Paloma d.d. on the equity capital increase into the company by ECO-Investment, a.s., (Czech Republic) in the amount of EUR 18.2 million at the price of EUR 4.01 per share. The equity capital increase procedure was conducted by Erste Group Bank AG and P&S CAPITAL, which served as financial advisors to Paloma.
Paloma management initiated the process of a capital increase in order to modernize production facilities, increase operating capacity; take advantage of current and future market opportunities and remove current bottlenecks, thereby enhancing efficiency and financial results.
According to Selih & Partnerji Partner Mia Kalas, “as a consequence of the recapitalization, the shareholding of the Slovenian Sovereign Holding (SSH) in Paloma was diluted from 71% to 31%.” Kalas, who led the firm’s team on the deal, reports that “it is generally expected that the SSH will dispose of its shareholding in the mandatory takeover offer to follow.”
Kalas was supported by Partners Tilen Terlep, Nina Selih, and Helena Butolen.
ECO-Investment was advised by Attorney-at-law Marko Kosmac.
ODI has represented a consortium of NLB, Banka Koper (Intesa Sanpaolo Group), Sberbank, Abanka, NKBM and Gorenjska Banka on a EUR 113 million syndicated debt refinancing of UNIOR, an advanced international company in metal-processing filed and active in tourism. UNIOR was represented by Rojs, Peljhan, Prelesniki & Partners.
ODI describes UNIOR as “one of the largest and most important Slovenian exporters with a 100-year old tradition operating in more than 19 countries worldwide with a yearly turnover of EUR 210 million.” The company is in the process of being privatized, which ODI describes as “currently the biggest anticipated Slovenian privatization procedure.”
The transaction began in May 2016 and was divided in two main stages: (i) negotiations and the signing of the main terms and conditions of the refinancing with the banks and UNIOR, completed in August 2016; and (ii) negotiations and the signing of the finance and ancillary security documents, completed in December 2016. The transaction has been structured so that existing debt has been refinanced by two separate syndicated facilities agreement prepared according to LMA standards. ODI’s work involved the preparation of legal opinions on the enforceability of security agreements.
The ODI team was led by Senior Associate Lea Vatovec, with assistance from Senior Associate Lea Pecek and Associate Masa Drkusic.
The Rojs, Peljhan, Prelesniki & Partners team advising UNIOR was led by Partner Grega Peljhan, the head of the firm’s Finance and Banking department, assisted by Senior Associate Minu Gvardjancic, Associate Jan Strozer, and Trainee Katja Dolezalek.
ODI has advised domestic and foreign financial creditors on the EUR 35 million out-of-court financial restructuring of debtor Vipap Videm Krsko, the largest paper mill in Slovenia and a prominent newsprint manufacturer in CEE.
ODI’s clients were NLB (the biggest Slovenian bank), NKBM (the second largest Slovenian bank), asset management company TCK, and Czech financial institutions IMOB and Prisko. According to ODI, it “advised on all legal issues in respect of restructuring procedure, drafted and negotiated the standstill agreement, performed a due diligence exercise of existing collaterals, and advised on corporate matters.” The firm was also involved in the first phase of the expected joint sale process, and drafted and negotiated the term sheet and joint sale agreement.
The ODI team consisted of Managing Partner Uros Ilic and Senior Associate Lea Vatovec, supported by Associate Masa Drkusic on the real estate due diligence exercise. Ernst & Young provided financial advice to Vipap Videm Krsko.
Schoenherr Slovenia Partner Eva Skufca says Slovenia currently has two major issues on its Competition agenda.
The first relates to the European Union’s Anti-Trust Damages Action Directive (Directive 2014/104/WU on Antitrust Damages Actions, which was signed into law on November 26, 2014 and published in the Official Journal of the European Union on December 5, 2014), which is required to be implemented into member states’ legal systems by December 27, 2016. The Directive is designed to remove many of the obstacles victims of anti-competitive behavior face in bringing their claims in court and to “fine-tune the interplay between private damages actions and public enforcement of the EU antitrust rules by the Commission and national competition authorities.” Unfortunately, Skufca reports, “not all states have taken it seriously enough,” and in Slovenia, she says, the country’s attempt to implement the Directive remains stuck in the inter-ministerial process — only now being debated and considered despite the looming deadline for its implementation. Skufca describes this as representing a lost opportunity to open it to public debate, and to promote the bill to ensure victims — current and future — are aware of their expanded rights, explaining that “because this is a very promising enforcement tool, it’s important to have a good debate on it now.”
Skufca says case law on anti-trust violations is scarce in Slovenia, giving infringers little to fear, and making it “much more difficult for victims to bring claims to court to achieve damages.” As a result, she believes the new law — despite its unfortunate process — is “a huge opportunity — I actually really do.” She explains that “private enforcement needs to be into the mind-set of people … but of course it’s also important to craft a reasonable balance in creating the law itself.”
The second major Competition-related matter in the country at the moment, Skufca reports, is the recent decision by the country’s Constitutional Court regarding the alleged violation of the rights of investors in five major Slovenian banks when both their equity capital and the subordinated instruments were written off as a result of extraordinary measures exercised by the Bank of Slovenia during the financial crisis. The Court’s ruling in this matter, Skufca says, requires the respective legislation on legal remedies to be amended, however in substance enshrines the EU state aid principles. [For an expanded view of this subject, please see the Slovenian article in the Experts Review section of the December 2016 issue of the CEE Legal Matters magazine].
Finally, Skufca says, “all of us lawyers as well as the general public are closely following everything that concerns both public entities in charge of managing state assets” – the Slovenian Sovereign holding, which is still missing two members of the Management Board, and the Bank Assets Management Company (Slovenia’s “bad bank”). Skufca says there’s currently a public call for applications for the Management Board vacancies, and says, “it will be interesting to see who is elected, and how this will shape the future dynamics and strategies of the Holding. There are still a couple of important privatization processes that need to be carried out and the Holding requires a skilled and stable management to be able to carry out its responsibilities.”
Schoenherr, working with Italy’s Legalitax firm, has advised Tecnopool S.p.A. on the acquisition of a 100% stake in Gopek d.d., the Slovenian holding company of the Gostol Group. The transaction, which entailed a block sale of shares held by over 100 (former) shareholders of Gopek, was signed and closed simultaneously on November 25, 2016 in Ljubljana. The parties agreed to keep the purchase price confidential.
Tecnopool is a company specializing in producing (whole) plants for the deep freezing, pasteurization, leavening, and baking of foodstuffs. The Gostol Group is a regional producer of bakery equipment with manufacturing sites in Slovenia, Bosnia and Herzegovina, and Russia. Tecnopool’s acquisition of the Gostol Gopan brand allows it to broaden its range of products to include the production of industrial ovens for baking.
Legalitax was lead counsel to Tecnopool, with a team made up of Partner Franco Fabris and Associate Matteo Stradiotto.
The Schoenherr team advising Tecnopool was led by Partner Marko Prusnik and included Partner Petra Smolnikar, Attorney at Law Eva Mozina, and Associates Lilit Zavasnik and Misa Tominec. Schoenherr Attorney Valdimir Markus was in charge of the Bosnian angle of the acquisition.
CMS has advised Andlinger & Company (A&C) on its acquisition of a majority interest in the Slovenian Eti Elektroelement d.d., a leading manufacturer of fuses and modular protection devices, from a sale consortium of 950 Eti shareholders, which also includes the company’s employees. The consortium was advised by the Slovenia’s Ulcar & Partnerji.
CMS reports that A&C has agreed to pay EUR 55.00 per share and that the share transfer will take place at the end of November 2016. According to CMS, A&C has the option of acquiring up to 100% of the shares in subsequent public takeover proceedings, and the purchase price for the complete acquisition is approximately EUR 27.5 million.
The sale consortium represents the largest shareholder group to be formed in Slovenia for the sale of a block of shares, leading CMS Partner Peter Huber, who headed the firm’s team on the transaction, to state that, “we are very pleased that we were able to successfully transact this purchase for our clients in a very ambitious timeframe, despite the complex shareholders structure.”
Huber was supported in the Vienna CMS office by Partner Clemens Grossmayer and Attorneys Anna Wieser and Dieter Zandler and Associate Bartholomaus Matt. The Slovenian CMS transactions team consisted of Partners Ales Lunder and Tomaz Petrovic, Senior Associates Vesna Tisler and Amela Zrt, and Associates Katja Balazic, Maja Pukl, and Tajda Vrhovec.
Editor’s Note: After this article was published Ulcar & Partnerji confirmed its involvement in the matter. The firm’s team consisted of Partners Matjaz Ulcar and Maja Menard and Senior Associate Glorija Dominko.
In addition, Selih & Patrnerji announced that Jean Mueller GmbH — advised by the firm — had also sold its shares in Eti Elektroelement to A&C as part of the same SPA (though it renegotiated the SPA’s contents separately from the consortium). The Selih & Partnerji team consisted of Partners Tilen Terlep and Natasa Pipan Nahtigal.