Category: Ukraine

Baker McKenzie’s Kyiv office has assisted Monsanto – now a part of the Bayer Group – on the creation of a seed processing facility project in Ukraine.

According to Baker McKenzie, its work, which lasted more than five years, encompassed real estate, project financing, and regulatory and competition issues. The firm reports that “our lawyers conducted legal due diligence, advised on various legal issues relating to construction, land, project financing, regulatory permits and licenses, as well as assisted in obtaining AMC approvals for the project, and more.”

According to Baker McKenzie, the seed processing facility officially opened on September 5, 2018, in Pochuiky, in Ukraine’s Zhytomyr region. The facility reportedly provides 85 permanent and 220 seasonal jobs.

The Baker McKenzie team was led by Managing Partner Serhiy Piontkovsky, supported by Partners Hennadiy Voytsitskyi and Oksana Simonova and Associate Elmaz Abkhairova. Additional assistance was provided by Senior Associates Hanna Shtepa and Olha Mikheieva and Associates Anna Smyrnova and Khrystyna Knygynytska.

Sayenko Kharenko advised Mriya Agro Holding and Hogan Lovells advised the company’s ad hoc committee of note-holders on the restructuring of its USD 1.1 billion debt, and the two firms advised the company on its subsequent September 12, 2018 sale of the company’s assets, including infrastructure facilities, machinery and land lease rights, to the Saudi Agricultural & Livestock Investment Company United Kingdom. Redcliffe Partners advised SALIC on the matter.

Latham & Watkins advised the bank creditors on the restructuring, and as previously reported, Dentons advised the joint liquidators. 

SALIC UK is a Saudi joint stock company that is owned by the Public Investment Fund of the Kingdom of Saudi Arabia. Its statutes state that its activity is in the field of investment in agricultural and livestock production in countries that have a competitive advantage in contributing to the production of selected foods and their availability for export markets. The SALIC strategy focuses on twelve product categories: wheat, barley, corn, soybean, rice, sugar, vegetable oils, green fodder, red meat, milk products, poultry and aquaculture.

Mriya Farming PLC is the parent company of the Mriya Group, which farms 150,000 hectares in the Ternopil, Khmelnitsky, Chernivtsi, Ivano-Frankivsk, L’viv and Rivne regions. The Mriya Group operates four modern silos with a total capacity of 380,000 tons, a potato storage facility with a total capacity of 52,000 tons, a seed plant and a potato starch plant. It specializes in growing wheat, rapeseed, barley, sunflowers, soybean, corn, sugar beet, potatoes and other crops

According to Sayenko Kharenko, “the deal involved not only billion dollar debt restructuring, but also a complex corporate reorganization of the Mriya Group. In accordance with Western standards, an independent board of directors was appointed. Within this reorganization, Mriya Group’s creditors became shareholders of Mriya Farming Plc, the Mriya Group’s holding company. The successful restructuring was followed by the subsequent sale of Mriya Group’s Ukrainian farming assets including infrastructure facilities, machinery, and companies leasing agriculture land plots to the Saudi Agricultural and Livestock Investment Company, United Kingdom. Upon sale completion, Mriya Agro Holding, as one of the largest agro industrial companies in Ukraine, will continue to operate in Ukraine alongside SALIC’s subsidiary, Continental Farmers Group.”

The restructuring involved the consolidation into a single secured debt instrument of 13 unsecured bank credits, seven suppliers’ credits, an ECP program, and two Eurobond issues. According to Latham & Watkins, as a result of the restructuring, “the total debt of the new Mriya group has decreased from USD 1.1 billion to USD 309.5 million, consisting of USD 49.3 million restructured secured debt, USD 208.1 million restructured unsecured debt, USD 46 million working capital notes, and USD 6.1 million new equipment leasing. The company will be serving the restructured unsecured debt according to the agreed schedule of interest and principal payments of the new senior secured notes issued in accordance with the terms of the Exchange Offer.”

Ton Huls, Chief Financial Officer of Mriya Agro Holding, described the restructuring as “an unprecedented and unique process.” According to Huls, “the group had dozens of creditors at different levels in numerous jurisdictions. We had to ensure fair and equal treatment for all creditors, both Ukrainian and international, and find a universal solution acceptable for all of them. For us, it was important to achieve transparency and efficiency, and that had to be done in the heavily regulated legal environment of Ukraine and other jurisdictions. I believe that the final deal structure we have worked out together with English legal counsel, Rothschild, and Sayenko Kharenko has achieved these objectives.”

The Sayenko Kharenko team advising Mriya Agro Holding was led by Partners Anton Korobeynikov and Alina Plyushch and included lawyers from the firm’s Banking and Finance, Corporate, Bankruptcy and Debt Restructuring, Litigation, and Competition practices. 

The Hogan Lovells team was led by Partner Alex Kay, supported by Partner Derek Meilman, Sylvain Dhennin, Philip Harle, Counsel Karla Dudek, Senior Associate Celine Buttanshaw, Hannah Wilson, Jill Barraclough, Christopher Hyde, Associates Jonathan Morris, Jennifer Lowe, Fadzai Mandaza, Philip Schuster , Adela Komorowska, and Fergus Kent, and Trainees Louise Pederson and Zachary Tan.

The Redcliffe Partners team advising SALIC on the sale was supervised by Partners Dmytro Fedoruk and Rob Shantz and led by Counsel Zoryana Sozanska-Matviychuk, assisted by Senior Associates Anna Pushkaryova and Nataliya Kovalyova, Associates Olesia Mykhailenko and Yulia Brusko, Junior Associates Anton Rekun and Bogdan Nykytiuk.

The Latham team was led by London Partner Helena Potts, Moscow Partner Ragnar Johannesen, and Moscow Counsel Edward Kempson, supported by London Associate Shamsun Nahar and Moscow Associate Vladimir Mikhailovsky. 

Editor’s Note: After this article was published Asters announced that it had advised the International Finance Corporation in connection with its restructuring deal with the Mriya group. The firm reports that its assistance “covered multiple dimensions, including developing the legal and tax models of the deal, evaluation of different options, negotiating the proposed models on behalf of the IFC, representing the IFC in the Ukrainian enforcement and bankruptcy proceedings, developing complex contractual settlement mechanisms and assisting the parties with the antitrust clearance.”

The Asters team was led by Partner Iryna Pokanay and included Counsel Gabriel Aslanian, Associates Vitaliy Kornev, Inna Bondarenko and Anatoliy Donets. Partner Konstyantyn Solyar and Senior Associate Marina Golovko worked on tax elements, and Partner Alexey Pustovit and Associate Olena Tsygulska handled antimonopoly matters.

Integrites has announced that it has merged with Pravochyn Attorneys at Law. Both firms will operate under Integrites brand, which now – including Pravochyn founder Oleksandr Onishchenko, who joins as a partner ⎯ has 17 partners and 8 counsels.

According to an Integrites press release, “the merger is a logical continuation of Integrites strategy towards strengthening and expanding its practices, specifically one of its key areas – dispute resolution. Pravochyn’s experience in litigation will, no doubt, become a great asset, complementing the Integrites practices of cross-border litigation, international arbitration, white-collar crime, commercial mediation and tax litigation and affirming the firm’s leadership position. Furthermore, Pravochyn joining Integrites will strengthen the company’s industrial expertise, in particular in aviation and heavy industry helping us provide the clients with better quality services.”

Pravochyn Founder Oleksandr Onishchenko joins Integrites as a partner.

Integrites Managing Partner Oleksiy Feliv said: “Our mission and key priority is to continuously improve the quality of satisfying our customers’ needs. That is why merging with Pravochyn is a part of consistent implementation of the firm’s strategy towards deeper specialization of practices. I am confident that extensive experience of the new team will provide an edge for our dispute resolution practice and help achieve our goal.”

For his part, Oleksandr Onishchenko commented: “Globalization trend in the legal market of Ukraine is not accidental, as the clients are becoming more demanding, willing to receive quality services from the best ones. I am convinced that the market is going through a period of active transformation to meet the new needs of the clients, which in conditions of stiff competition require particular attention and monitoring. I believe that we, at Integrites, will be able to implement much more complex and comprehensive projects that correspond to the professional qualities and expertise depth of the lawyers of JSC Pravochyn.” 

Sayenko Kharenko has acted as a Ukrainian legal counsel to the European Fund for Southeast Europe in connection with Ukrainian hryvnia financing equivalent to EUR 10 million to the Public Joint Stock Company Kredobank, a Ukrainian subsidiary of Poland’s PKO Bank Polski S.A.

The transaction included the purchase of UAH 250 million local corporate bonds of Kredobank, which, according to Sayenko Kharenko, makes it the largest non-government bond investment in Ukraine in 2018.

Kredobank will use the proceeds to offer longer-term local currency financing to micro and small enterprises in Ukraine.

Igor Lozenko, Sayekno Kharenko Counsel, said, “This transaction is remarkable as it is one of the few on the Ukrainian market recently where a foreign investor used local legal non-government debt instruments.”

The European Fund for Southeast Europe is a privately managed development finance fund initiated by KfW Development Bank with the financial support of the German Federal Ministry for Economic Cooperation and Development and the European Commission. The EFSE uses capital provided by donor agencies, international financial institutions and private institutional investors to finance MSEs in the target region, which includes Ukraine.

Sayenko Kharenko`s team was led by Counsel Igor Lozenko and included Associates Dmytro Vasylyna, Denis Nakonechnyi, and Yuri Dmytrenko, and Junior Associate Oleksandra Maksymenko.

Sayekno Kharenko did not reply to an inquiry about the deal.

The London office of K&L Gates has advised NBT AS and its Ukrainian subsidiary SyvashEnergoProm LLC on the Syvash Wind Power Project in Ukraine. Nordex Energy GmbH, advised by Dentons, will act as a turbine supplier for the project. Sunshine Law and Volkov & Partners advised engineering, procurement, and construction contractors Power Construction Corporation of China, Ltd. and POWERCHINA Fujian Engineering Co. Ltd.

The Norwegian wind farm and renewable energy developer NBT and SyvashEnergoProm are leading investors in the development, construction. and financing of a power generation facility and new substation for the 250 MW Syvash Wind Power Project in Kherson Oblast, in Southern Ukraine.

K&L Gates reports that SyvashEnergoProm’s recently signed a EUR 292 million engineering, procurement, and construction (EPC) Contract with Power Construction Corporation of China and POWERCHINA Fujian Engineering, which will serve as the EPC contractor for the wind farm project. Nordex Energy in addition will act as a turbine supplier for the project and as service provider under a 15-year Warranty Service and Maintenance Agreement, which is planned to be signed in early September 2018.

The K&L Gates team was led by Counsel Alex Blomfield. The team also included London Partners Anthony Fine, Mayank Gupta, James Green, Ian Meredith, Wojciech Sadowski, Matthew Walker, and Giles Bavister, along with London Associates Joshua Spry, Peter O’Donnell, and Sherry Scrivens, Warsaw Associate Dominika Jedrzejczyk, Seattle Associate Nicholas Nahum, Boston Associate Mike O’Neill, and London trainee solicitors Louise Bond, Francesca Norman, Hannah Davies, and Charles Oliver.

Dentons’ team was led by Ukraine Managing Partner Oleg Batyuk and Kyiv Partner Igor Davydenko and included Counsels Oleg Kuchanskyy, Maksym Sysoiev, and Anna Tkachenko and Associates Tetiana Gryn, Roman Mehedynyuk, Nikolay Zhovner, and Oleksandra Piskun.

China’s Sunshine Law team was led by Senior Associate Lori Zhu.

Volkov & Partners did not reply to our inquiry about the deal.

Editor’s Note: After this article was published, Integrites announced that it had served as Ukrainian counsel to NBT AS on the project. The Integrites team was led by Managing Partner Oleksiy Feliv and included Partner Dmytro Marchukov, Counsels Viktoriya Fomenko, Pavlo Loginov, and Serhii Uvarov, Senior Associates Dmytro Kiselyov, Gennadii Roschepii, and Anton Babak, Associate Olena Savchuk, and Junior Associate Kateryna Korneliuk.

Dentons has advised Chris Iacovides and Andri Antoniou (of the CRI Group), the joint liquidators of Ukraine’s Mriya Agro Holding Public Limited, which is in liquidation in Cyprus, in relation to the company’s successful debt restructuring.

According to Dentons, “this complex, three-year transaction involved a group-wide corporate reorganization of the industrial asset and land bank holding companies of the Mriya group alongside a financial restructuring which reduced the Mriya group debt from USD 1.1 billion to USD 309.5 million. The successful implementation of this innovative restructuring has enabled the Mriya group business to continue and provides the best possible return to all creditors in the liquidation.”

The Dentons team was led by London-based Restructuring Partners Neil Griffiths and Celia Hayward, Capital Markets Partners David Cohen and Cameron Half, and involved Dentons’ Restructuring teams in Ukraine and Germany.

Ilyashev & Partners Law Firm has successfully represented Ukraine’s State Enterprise Ukrinterenergo in a dispute with the Russian state-owned CJSC Inter RAO UES regarding the supply of Russian electricity to Ukraine’s Luhansk and Donetsk territories, still occupied by Russian-supported separatists.

According to an Ilyashev & Partners representative, “the dispute was about supply of electricity from Russia to Ukraine through stations located in Luhansk and Donetsk regions. When separatists took control over that part of the border, they also occupied the stations. Ukrinterenergo notified Inter RAO that Ukraine did not obtain the electricity supplied to these stations, but Inter RAO continued supplying electricity for some time, and asked Ukrinterenergo to pay for it.”

“The case was initially heard by the ICAC at the Russian Chamber of Commerce and Industry,” the spokesperson explained, “which decided in favor of Russia. Ukrinterenergo’s appeal of the decision to a Russian court was unsuccessful. However, Inter RAO failed to ask the Russian court to recognize the executive order and had no option but to go to the Ukrainian court.” 

Ilyashev & Partners Senior Partner Roman Marchenko did not mince words in his description of the case. “Despite the absolutely biased decision of the ICAC at the Russian Chamber of Commerce, as a result of which the Ukrainian company was ordered to pay USD 6.7 million in favor of Russia for electricity supply to separatists, lawyers of the Russian office of Ilyashev & Partners Law Firm managed to prevent the receipt of an executive order in the case.”

The dispute is currently being considered by the Ukrainian court, where the interests of Ukrinterenergo are represented by the Kyiv office of Ilyashev & Partners.

Previously, Ilyashev & Partners represented Ukrinterenergo at the Russian Arbitration Court regarding its application to have a decision delivered by the ICAC at the Ukrainian Chamber of Commerce and Industry against Rusneftedobycha recognized.

Sayenko Kharenko’s international arbitration team has helped Safege-Suez Consulting reach an agreement with Ukraine’s National Commission for State Regulation of Energy and Public Utilities regarding the completion of payment for consultancy services provided within the framework of the district heating regulatory reform support program funded by the World Bank. The contract price was EUR 1.2 million.

According to Sayenko Kharenko, its work “included negotiating terms of amicable settlement with the National Commission for State Regulation of Energy and Public Utilities, preparing a memorandum with assessment of the client’s legal position, analyzing the terms of the advance payment guarantee, advising on expert determination proceedings, and corresponding with the World Bank on various issues.”

Safège-Suez Consulting is a French company providing engineering consultancy services in various fields such as infrastructure, energy, urban development and telecommunications.

Sayenko Kharenko’s team included Counsel Volodymyr Yaremko and Junior Associate Vladlena Lavrushyna, and was led by Partner Tatyana Slipachuk.

Asters has advised the EBRD on a USD 15 million loan to the Modern-Expo Group, one of the largest manufacturers and suppliers of fixtures and equipment for retail stores and warehouses in Central and Eastern Europe.

Modern-Expo is a privately owned company which has been operating in Ukraine for over 20 years, and which expanded to Belarus in 2014. Around 65% of company’s revenues are generated from export sales to more than 60 countries around the world. It supplies its products to major international retailers including Auchan, Carrefour, Billa, and Nestle, among others.

According to Asters, the seven-year loan will be used to increase production volumes at the principal manufacturing sites in Lutsk (in Ukraine) and in Vitebsk (in Belarus) and to restructure the company’s balance sheet.

Asters’ team consisted of Partner Iryna Pokanay, Counsel Gabriel Aslanian, and Associate Inna Bondarenko.

Eterna Law has advised Gamma Solar holding on an investment into the development of a solar power station project in the Vinnytsia Region of Ukraine.

Gamma Solar Holding is a European solar energy projects operator and investor which invests in projects of renewable energy in Europe (including Greece, Italy, and Spain) and Africa. The group is commencing an investment into the development of a solar power station project with a 2.3 megawatt capacity.

The Eterna Law team was led by Partner Maksym Uslystyi and included Associate Mykhailo Lytvyn.