Category: Ukraine

  • Avellum and Sayenko Kharenko Advise on Ukraine’s USD 3 Billion Sovereign Bond Issue and Tender Offer

    Avellum and Sayenko Kharenko Advise on Ukraine’s USD 3 Billion Sovereign Bond Issue and Tender Offer

    Avellum has acted as Ukrainian legal advisor to the Ministry of Finance of Ukraine on its USD 3 billion, 15-year, 7.375% Eurobond issue, which was combined with a cash tender offer to the holders of the outstanding Eurobonds due 2019 and 2020. White & Case advised the Ministry of Finance on matters of English and American law, while Sayenko Kharenko (on Ukrainian law) and Latham & Watkins (on American and English law) advised joint lead managers BNP Paribas, Goldman Sachs, and J.P. Morgan Securities plc.

    The transaction is the first stand-alone sovereign bond issue by Ukraine since its 2015 sovereign debt restructuring. A portion of the net proceeds of the new issue were applied by Ukraine to fund the repurchase of USD 1.16 billion of its 2019 Eurobonds and USD 415 million of its 2020 Eurobonds. The remaining net proceeds of the new issue will be used for general budgetary purposes.

    “It was an immense privilege for us to act for the Ministry of Finance of Ukraine on this truly remarkable transaction, in particular, in terms of its size and maturity,” commented Avellum Partner Glib Bondar, who led the firm’s team on the deal. “It was very well received by the international investment community demonstrating Ukraine’s successful return to the international capital markets.” Bondar was supported by Avellum Senior Associate Taras Dmukhovskyy, Tax Counsel Vadim Medvedev, and Associates Anna Melnychuk, Pavlo Shevchenko, Orest Franchuk, Anastasia Voronova, Oleg Krainskyi, and Vladyslav Aleksandrov.

    Sayenko Kharenko Partner Nazar Chernyavsky commented: “We are proud to be involved in such a landmark transaction, especially given its importance for the revival of investors’ interest in Ukraine.” His team included Senior Associates Marta Lozenko and Konstantin Penskoy, Associates Taras Shyb and Andriy Tsyatsyak, and Junior Associate Oles Trachuk.

  • Asters Advises ViDi Group Companies on the First Ever Financial Restructuring Involving State Bank in Ukraine

    Asters Advises ViDi Group Companies on the First Ever Financial Restructuring Involving State Bank in Ukraine

    Asters has advised the ViDi Group on the restructuring of debt belonging to group companies ViDi Autocity Kiltseva and LLC ViDi Autocity from JSC Oschadbank, implemented in accordance with Ukraine’s “On Financial Restructuring” Law.

    The VіDі Group is one of the largest car dealers on the Ukrainian market. The company portfolio includes 16 car brands. The VіDі Group also includes companies operating in the insurance, leasing and logistics spheres.

    According to Asters, “JSC Oschadbank is a state bank that is the second largest in Ukraine by assets and the biggest by the number of branches among all the Ukrainian banks. The total loan and investment portfolio of the Bank as of August 1, 2017 is UAH 147.6 billion.”

    “Our firm played an active part in drafting the new Law “On Financial Restructuring” along with the World Bank and the EBRD experts,” said Asters Partner Iryna Pokanay. “Finally this work has materialized into the first ever successful financial restructuring involving a state bank. This project is a serious start for subsequent restructurings and marks an opportunity for Ukrainian companies to implement turnarounds and for lenders to increase the efficiency of cooperation with their borrowers.”

    The Asters team consisted of Partner Iryna Pokanay, Counsel Gabriel Aslanian, and Associates Inna Bondarenko and Oleksandr Khomenko.

  • Baker McKenzie Kyiv Assists Ukrenergo with Corporate Governance Reform

    Baker McKenzie Kyiv Assists Ukrenergo with Corporate Governance Reform

    Baker McKenzie’s Kyiv office has supported Ukrenergo in implementing a corporate governance reform to institutionalize the supervisory board and ensure that the company’s upgraded management structure is in line with OECD guidelines.

    According to Baker McKenzie, “the team has prepared the restated charter documents and represented the company in negotiations with the Ministry of Energy and Coal Industry of Ukraine up until adoption of the company’s updated charter on September 12, 2017.”

    Ukrenergo is a state-owned power company responsible for operational and technological control of the Integrated Power System of Ukraine and electricity transmission via trunk power grids from generating plants to distribution networks of regional electricity suppliers. The company’s network includes eight regional power systems, covering the entire territory of Ukraine and employing over 13 thousand individuals.

    The Baker McKenzie team was led by Managing Partner Serhiy Piontkovsky and includes Senior Associate Andrii Moskalyk and Associate Oleksandr Kez. Commenting on the news, Piontkovsky noted: “This is an unprecedented case of developing a corporate governance structure and pioneering an independent board established at a state unitary enterprise. Baker McKenzie will continue to provide legal assistance to the company on its way towards corporatization and subsequent certification as a transmission system operator.” 

  • CMS Advises M.V. Cargo on Financing for New Grain Terminal Construction Project in Yuzhni Port

    CMS Advises M.V. Cargo on Financing for New Grain Terminal Construction Project in Yuzhni Port

    CMS has advised M.V. Cargo in respect of two parallel loans, totaling USD 74 million, made available to it by the EBRD and the IFC to partly finance M.V. Cargo’s construction of a new modern grain terminal in Ukraine’s Black Sea port of Yuzhni capable of handling up to 5 million tons of grain annually.

    The overall value of the investment into the project is expected to exceed USD 150 million, and construction of the grain terminal is expected to be finalized in 2018.

    According to CMS, “this financing is one of the necessary steps in the establishment of a joint venture with Cargill, a leading international agricultural company – a transaction which CMS also advised on in 2016. It is a landmark project of strategic importance to Ukraine, intended to help sustain its leading position among grain exporting countries, delivering Ukrainian grain to markets all over the world. The financing will also serve as a positive signal to foreign investors and lenders considering investing or lending into Ukraine.”

    The CMS financing team was led by Simona Marin and Senior Associate Kateryna Chechulina, and included Khrystyna Korpan and other lawyers from CMS’ offices in Luxembourg and the Netherlands. Partner Graham Conlon, Senior Associate Tetyana Dovgan and Associate Vitalii Mainarovych remain involved on the corporate/joint-venture side.

    As previously reported, Redcliffe Partners served as Ukrainian legal counsel to the EBRD and the IFC, with Clifford Chance advising on English law aspects of the financing.

  • Redcliffe Partners and Clifford Chance Advise EBRD and IFC on Project Financing of New Grain Terminal in Yuzhny Port

    Redcliffe Partners and Clifford Chance Advise EBRD and IFC on Project Financing of New Grain Terminal in Yuzhny Port

    Redcliffe Partners, working alongside Clifford Chance, has acted as legal counsel to the EBRD and the IFC in connection with their extension of two parallel senior secured loans to M.V. Cargo to finance the construction of a new private grain terminal in Ukraine’s Black Sea commercial port, Yuzhny.

    The two loans amount to a total of USD 74 million. The total projects costs are estimated at approximately USD 150 million.

    The project is being undertaken jointly by M.V. Cargo, Cargill, the world’s largest provider of agricultural products and services, and the Ukrainian Sea Ports Authority, a state enterprise managing Ukrainian seaports and infrastructure. The new terminal, which is expected to begin operations in spring 2018, will allow the cargoes of high tonnage vessels to be processed, and will be capable of handling up to five million tons of grain annually.

    Redcliffe’s team advising on the transaction included Managing Partner Olexiy Soshenko, Associate Evgeniy Vazhynskiy, and Junior Associate Anatoliy Doludenko. 

    Commenting on the project, Olexiy Soshenko, Head of the Redcliffe Partners’ Banking & Finance practice, said: “We are proud to have been able to support our long-standing clients in this strategic project finance transaction. The new terminal will significantly contribute to port facilities in the Black Sea region, and will benefit Ukrainian farmers and the overall development of agribusiness in the region.”

    Clifford Chance advised the EBRD and IFC on the English law aspects of the financing.

    Editor’s Note: After this article was published CEE Legal Matters was informed that CMS had advised M.V. Cargo on the financing.

  • KPD Consulting Successful for ZED-Ukraine in Debt Collection Matter

    KPD Consulting Successful for ZED-Ukraine in Debt Collection Matter

    KPD Consulting has successfully represented ZED-Ukraine in the Economic Court of Kyiv in a debt collection matter.

    According to KPD, “the Economic Court of Kyiv satisfied the claim of ZED-Ukraine LLC and collected the debt under the commission contract for the benefit of the claimant.” 

    KPD Consulting Managing Partner Igor Kalitventsev commented: “The decision of the Economic Court of Kyiv is extremely important for the entire system of providing content services and related activities in this field, as it brought an end to unlawful and sometimes even subjectively provocative and unfair activity on avoidance of performing by contractors of their obligations under the contracts of commission. We are glad that the court instance agreed with the arguments constituting our legal position.”

    The firm’s team was supervised by Director of Dispute Resolution and Bankruptcy Kristina Marynoshenko and was led by Associate Oleg Bezvershenko.

  • KPD Consulting Advises Sberbank on Guarantee Enforcement Matter

    KPD Consulting Advises Sberbank on Guarantee Enforcement Matter

    KPD Consulting has advised PJSC Sberbank on the enforcement of a guarantee.   

    According to KPD, “the scope of services encompassed coordinating advisers in several jurisdictions. Serving the demands for payment in Cyprus was arranged with significant support of colleagues from the Stelios Americanos Law Firm office in Nicosia. The client’s demands exceeded USD 20 million, which was successfully recovered from the guarantor.”

    The firm’s team was led by Partner Vladyslav Kysil.

  • KPD Consulting Advises Master Avia on Extension of Loan

    KPD Consulting Advises Master Avia on Extension of Loan

    KPD Consulting has successfully assisted Master-Avia LLC (the operator of the Kyiv International Airport) in extending the USD 34 million loan facility from an unnamed commercial bank with foreign capital. 

    The firm’s support included “preparation of the collateral documentation and issuance of legal opinions under the Law of Ukraine and the Law of Cyprus.” KPD also instructed Cypriot advisers Pelaghias, Christodoulou, Vrachas LLC.

    The KPD team was led by Partner Vladyslav Kysil.

  • Antika Advises AWT Bavaria on Business Restructuring and Construction

    Antika Advises AWT Bavaria on Business Restructuring and Construction

    The Antika Law Firm has advised AWT Bavaria on issues of business restructuring and construction matters in Ukraine.

    According to Antika, “AWT Bavaria, the official importer of BMW and MINI in Ukraine, is implementing a business restructuring project. The main purpose of the project is to establish a modern and highly-effective management system, as well as to increase corporate security and comfort in client servicing by commissioning new administrative, sales, and technical capacities, structuring the business into distinct and specific areas, establishing a protected structure of assets, etc.”

    A group led by Antika Partner Andrey Kuznetsov worked on corporate, tax, labour and other aspects of the project, with Partners Alexander Burtovoy and Sergii Korniienko engaged during the concept development of the AWT’s business restructuring. Sergii Korniienko also was responsible for work in corporate law, including the obtaining of necessary permits, while Senior Associate Alexandra Fedorenko focused her work on labor and tax issues.

    According to Antika, “it is worth mentioning that one of the outstanding elements of the project was successful completion and commissioning of the importer center, the first start-up complex of first stage development, in the Boryspil district of the Kyiv region, as well as the acquisition of the right of ownership on the completed object by the asset management company belonging to the client’s group of companies. The new importer center meets all corporate standards and requirements of vehicle producers and will be the largest platform for the exhibition, sale, and original technical maintenance of BMW, Rolls Royce, and MINI on the territory of Ukraine. A team of lawyers, among them Senior Associates Vasyl Sheretko and Alexander Tretiakov and Associate Inna Koval, all led and managed by Partner Alexander Burtovoy, were engaged in the fulfillment of this task. The grand opening of the facility was held on August 31, 2017.”

    Antika’s Managing Partner Alexey Kot supervised and coordinated the lawyers working on the project.

  • Protecting Confidential Employer Information

    Preserving confidentiality is always a top priority for a successful business, especially if you have an advanced R&D department. Taking into account the need to freely transfer information on the one hand and the strict necessity to preserve the safety of personal data and databases on the other, the issue of confidentiality becomes even more important.

    In Ukraine, unlike in Europe and the USA, legislation provides employers with very few instruments to protect their commercial secrets. As a result, companies must develop their own legal instruments to keep such secrets secure. 

    Currently, the best instruments for an employer wishing to protect confidential information are: (1) adopting a comprehensive policy on confidential information and incorporating relevant provisions into its charter; and (2) incorporating relevant restrictions into employment agreements and job descriptions. There is also hope that the regulation of confidentiality protections will improve for the employer with the adoption of the new Labor code of Ukraine.

    Internal Regulation on Confidential Information

    We recommend that every employer have a separate and detailed policy on confidential information to: (1) define commercial secrets and confidential information in maximum detail; (2) regulate procedures on the access, transfer, and safekeeping of commercial information; and (3) provide for sanctions for violations of confidentiality.

    The same provisions can be mirrored in the charter of the company and the collective bargaining agreement (if one exists).

    The creation of such a policy allows employers to regulate the procedures related to confidential information in detail on the company level and provides them with multiple instruments to defend their interests in courts. At the same time, there is uncertainty regarding the enforcement of such policies, since Ukrainian courts tend to rule in favor of employees when employers try to impose restrictions which are not expressly provided for by law.

    Employment Contract and Job Description

    Including strict confidentiality obligations into employment contracts is a common practice in Ukrainian offices of international companies. If properly implemented, doing this allows the employer to impose certain financial and disciplinary liabilities on employees making unauthorized disclosures of confidential information. Again, however, there is no certainty regarding how the courts will enforce the relevant provisions of such contracts.

    From a practical point of view, a separate confidentiality agreement is a better solution, because, as a civil law agreement rather than an employment contract, the courts’ reluctance to allow for expanded restrictions in an employment relationship do not apply.

    To further improve the protection of confidential information, we recommend that employers insert extensive obligations to preserve confidential information into employee job descriptions. When preparing such job descriptions, we recommend that the widest possible range of issues related to treatment of commercial secrets be included. 

    If the obligations related to commercial secrets are included in the job description, a violation may serve as grounds for dismissal of the employee. However, there is a risk that such a dismissal may be challenged in court, since commercial secret obligations do not always correlate with the employee’s job function and their inclusion in the job description may be viewed as deterioration of working conditions as compared to standards guaranteed by the Labor code.

    New Hope

    The draft of the new Labor Code of Ukraine, which we expect to be adopted this year, provides for a more specific regulation of confidentiality issues. In particular, the draft provides employers with the ability to dismiss employees for unauthorised disclosures of confidential information. This innovation will provide employers with real leverage in respect of the safety of confidential information and, it is hoped, will help to shift court practice on cases related to the protection of commercial secrets in favor of employers.

    Another right set out in the draft of the new Labor Code relates to the monitoring of employee activities at work. The draft allows employers to monitor and record employees’ work activities by technical means, subject to prior written notice. Although not directly related to commercial secrets, this is yet another instrument which can assist in preventing leakage of confidential information. This instrument can also be extremely helpful in internal corporate investigations.

    If the new Labor Code is adopted soon, and without material changes, it should positively affect the regulatory framework for protection of confidential employer information in Ukraine.

    By Mykola Stetsenko, Managing Partner, Yuriy Zaremba, Associate, Avellum

    This Article was originally published in Issue 4.6 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.