Category: Deals and Cases

Clifford Chance has advised Fortbet Holdings Limited, a subsidiary of Penta Investments, on a tender offer for shares in the Dutch company Fortuna Entertainment Group N.V..

Fortuna is the largest betting operator in CEE, and it is listed on both the Prague and the Warsaw Stock Exchanges. 

Clifford Chance’s team was led by Counsel Wojciech Polz and included, in Poland, Counsel Jaroslaw Lorenc, Senior Associate Kamil Sarnecki, Associate Katarzyna Aleksandrowicz, and in the Czech Republic, Partner Alex Cook, Senior Associate Vladimir Rylich and Michal Jasek, and Associate Michal Pelikan, and in the Netherlands, Counsel Han Teerink and Associates David Shearer and Tiemen Drenth.

Clifford Chance and Dentons are reporting that the EUR 650 million sale of a 265,000 square meter CEE retail portfolio by CBRE Global Investors to CPI Property Group that was initially reported in January closed on March 29, 2017, and more information has been learned about the structuring of the deal and the firms involved.

As reported on January 18, 2017, Clifford Chance (advising CBRE) and Dentons (advising CPI) advised on the sale of properties including 11 shopping centers in the Czech Republic, Poland, Hungary, and Romania. As reported in the initial story, Szecsenyi and Partners worked alongside Clifford Chance in advising on the Hungarian part of the transaction.

The portfolio, with a total leasable area of approximately 265 thousand square meters, consists of the Olympia Plzen shopping center and Retail Park, Nisa shopping center and Zlaty Andel in the Czech Republic; the Andrassy Complex, Polus shopping center, Campona shopping center, and two Interspar retail warehouses in Hungary; the Ogrody shopping center in Poland; and the Felicia shopping center in Romania. 

As reported at the time, the Clifford Chance team was led by Partner Emil Holub and Associate Aneta Sosnovcova, who noted: “This has been one of the most challenging and yet rewarding transactions of my career. It had it all: complex, pan-regional due diligence; multi-faceted financing arrangements; antimonopoly clearance in a number of jurisdictions; and, above all, a successful close!”

Also as reported at the time, the Szecsenyi team was led by Daniel Kellner.

The Dentons team advising CPI consisted of Partner Evan Lazar and included Partners Stewart Middleman, Judit Kovari, Monika Sitowicz, Perry Zizzi, and Bogdan Papandopol, Of Counsel Marcell Szonyi, Counsel Marketa Tvrda, and Senior Associate Lukasz Zwiercan, among others.

Dentons is now also reporting that, in addition to the acquisition, it assisted CPI in refinancing of the centers in Poland, the Czech Republic and Hungary with the following banks: Ceskoslovenska obchodni banka, a. s. and Landesbank Hessen-Thuringen Girozentrale in the Czech Republic, Landesbank Hessen-Thuringen Girozentrale in Poland, and UniCredit Bank Hungary Zrt, Raiffeisen Bank Zrt., Sberbank Magyarorszag Zrt. and Sberbank CZ a.s. in Hungary.

The refinancing banks were advised by DLA Piper in Hungary, Kinstellar in the Czech Republic, and BSJP in Poland.

The DLA Piper team was led by Partner Gabor Borbely. 

The Kinstellar team advising Helaba and CSOB on the Czech law aspects of the acquisition financing was led by Partner Klara Stepankova, supported by Partner Kamil Blazek and Managing Associate Leo Javorek.

The BJSP team in Poland advising Landesbank Hessen-Thuringen on financing of the Polish part of the CPI acquisition was led by Partner Katarzyna Domanska-Moldawa, supported by Agnieszka Wolny and Maciej Kurek.

Greenberg Traurig is announcing that it advised Anheuser-Busch InBev on the Polish aspects of the sale to Japanese brewer Asahi Group Holdings, Ltd. of the businesses that prior to its combination with AB InBev were owned by SABMiller plc in Central and Eastern Europe. Similarly, Suciu Popa is announcing that it advised SAB Miller on the sale of its Romanian businesses.

As previously announced, Freshfields was global counsel to AB InBev on the deal, and Allen & Overy advised the Asahi Group.

According to Greenberg Traurig, AB InBev had made commitments to the European Commission to sell SABMiller’s CEE businesses and assets, including Kompania Piwowarska, following its takeover of SABMiller. According to Greenberg Traurig, “Kompania Piwowarska operates three breweries in Poland: Tyskie Browary Ksiazece in Tychy, the Dojlidy Brewery in Bialystok, and Lech Browary Wielkopolski in Poznan.”

Greenberg Traurig’s team was led by Warsaw Managing Partner Jaroslaw Grzesiak and Partner Rafal Baranowski and London Partner Stephen Horvath, all supported by Senior Associate Filip Kijowski and Associate Tomasz Denko.

Suciu Popa’s work in Romania was led by Managing Partner Miruna Suciu, supported by Partner Cleopatra Leahu, among others.

Clifford Chance has advised Deutsche Bank, ING, Natixis, and UniCredit in their capacity as the coordinating committee for the pre-export finance banks in connection with the successful implementation of a USD 2.3 billion debt restructuring for Metinvest. Ukraine’s Redcliffe Partners, working alongside Clifford Chance, provided Ukrainian law advice to the committee. Baker McKenzie and Allen & Overy advised Metinvest on the restructuring.

Metinvest is a vertically integrated group of Ukrainian steel and mining companies and one of the largest producers of iron ore raw materials and steel in the CIS.

According to a Metinvest press release, “based on the agreement reached, three series of guaranteed notes – due in 2016, 2017, and 2018 – have been cancelled and delisted and replaced with new listed senior secured notes totaling approximately USD 1.2 billion, due in December 2021 and with new terms and conditions. In addition, four PXF syndicated loan agreements have been amended and restated the terms of which now provide for, among other things, the combining of the four existing PXF facilities into one facility of approximately USD 1.1 billion due in June 2021.”

In addition, according to Metinvest, “the terms of Metinvest’s new debt instruments provide for the debt maturities to be extended by five years, including, in respect of the new PXF facility,  two years of grace period on the scheduled amortization of principal. The restructuring provides cash flow flexibility to the Group by imposing a requirement to pay only 30% of accrued interest in cash until the end of 2018. The agreements reached set forth a repayment schedule that allows Metinvest to pursue its production and investment objectives in the next five years, while increasing business profitability.”

According to Clifford Chance, “the restructuring … was undertaken against a backdrop of volatile commodity prices, closed capital markets for Ukrainian issuers, and exceptionally difficult circumstances in the east of Ukraine. Its successful implementation is a remarkable achievement for Metinvest and its stakeholders.”

The restructuring was implemented through an English law scheme of arrangement sanctioned by the High Court of Justice of England and Wales. Clifford Chance reports that “the remarkably high level of creditor consent to the restructuring (in excess of 90% by value across the bank debt and notes) is testament to the result achieved by the coordinating committee representing the pre-export finance banks and the ad hoc committee representing the noteholders.”

Commenting on the event, Yuriy Ryzhenkov, Chief Executive Officer of Metinvest, said: “The Group had to embark on a debt restructuring due to multi-year low global prices of steel and iron ore products, reduced production volumes amid the conflict in Eastern Ukraine, and its inability to refinance. This deal is unprecedented for the industry and corporate sector of Ukraine. The restructuring negotiations started in early 2015, and we have been in constructive dialogue with all stakeholders throughout this time. The Group has always respected its obligations to creditors, having never demanded a write-off of any part of debt. With creditors’ support, we have arrived at a common solution, cured defaults, deferred repayments for five years and issued new instruments. As such, we have increased our creditors’ confidence and maintained the Group’s access to international capital markets. We would also like to thank our legal advisors, Allen & Overy and Baker & McKenzie, our financial advisor, Rothschild, and our information agent, Lucid.” 

The Clifford Chance team was led by Partner Alistair McGillivray in London, supported by Partner Adam Fadian from the firm’s Moscow office, Partner Jared Grubb from the Istanbul office, and Partner Jelle Hofland and Counsel Ilse van Gasteren from the Amsterdam office. Clifford Chance’s London-based Partner Adrian Cohen, Senior Associate Natalie Mills, and Lawyer Tim Lees from the firm’s restructuring and insolvency practice led on the scheme of arrangement and advised on the restructuring generally. Other lawyers included Shuyan Tan, Natalia Veryasova, Anna Booth, Charlotte Spierings, Christina Gu, Sasha Kobyasheva and Michael Anderson.

The Redcliffe Partners team was led by Managing Partner Olexiy Soshenko, supported by Associates Olesia Mykhailenko and Evgeniy Vazhynskiy and Junior Associate Oleg Krainsky.

Editor’s Note: After this article was published, Baker McKenzie announced that its team had been led by Partner Serhiy Chorny from the Kyiv office and Partners Ian Jack and Roy Pearce from the London office. According to the firm, “key input was provided by Hanna Shtepa, Maksym Hlotov, Stepanyda Badovska, Ganna Smyrnova, Anna Boyko, and Bogdan Dyakovych in Kyiv; Adam Farlow, Maxim Khrapov, Luka Lightfoot, and Chris Hogan in London and Johannesburg; and Robert van Agteren, Valerie van den Berg, and Koen Bos in Amsterdam.”

Subsequently, Avellum announced that it had acted as Ukrainian law counsel to the holders of guaranteed notes issued by Metinvest B.V. The firm’s team included Partner Glib Bondar, Counsel Igor Lozenko, Senior Associate Taras Dmukhovskyy, and Associates Taras Stadniichuk and Orest Franchuk.

Ostermann & Partners has assisted APS Holding with its acquisition of a Croatian portfolio of non-performing loans with a nominal value significantly exceeding EUR 100 million from Hrvatska Postanska Banka with the approval of the Croatian National Bank. The Hrvatska Postanska Bank was reportedly advised by Schoenherr.

According to an APS press release, the acquisition includes secured and unsecured non-performing corporate loans, with the secured positions held against mostly residential, commercial, and industrial property. Following the transaction, APS has established a permanent office in Zagreb to service the NPL portfolio, which should be populated by over 40 debt collection professionals, analysts, and other personnel by the end of Q2 2017.

Founded in 2004 and headquartered in Prague, APS specializes in investment, management, and recovery of loan portfolios and real estate within Central and South-Eastern Europe. According to that same APS press release, the company, which claims “more than 600 experts … provides services in 11 European countries: Bulgaria, Croatia, Cyprus, the Czech Republic, Hungary, Montenegro, Poland, Romania, Greece, Serbia and Slovakia.” It manages 75 NPL portfolios with a total nominal value above EUR 4.7 billion “and provides exclusive investment advisory to four investments vehicles and recognized institutional investors.”

Since the beginning of 2016, APS has expanded its operations into Cyprus, Hungary, and now Croatia. The Cypriot expansion is based on a joint venture with Hellenic bank (APS 51%, Hellenic Bank 49%) and involves a distressed debt portfolio of EUR 2.4 billion (as reported by CEE Legal Matters on January 19, 2017). The Hungarian office was established in January 2017 (as reported by CEE Legal Matters on March 23, 2017)

APS has a single shareholder, co-founder and CEO Martin Machon, who commented, following the Croatian acquisition, that: “Our target is to assist banks with distressed debts and help debtors to be debt free under fair and mutually advantageous conditions. We are going to bring our best professional practice based on more than 500,000 debt recovery cases and 13 years of history on the EU market. We are as well looking for other investment opportunities on the dynamic Croatian market.”

Victor Angelescu, CEE Regional Director of APS commented that: “The portfolio from Hrvatska Postanska Banka is just a start for us and we expect to be successful in other tenders in Q1 2017. Although the first employees are already on board, we are still searching on the market for ambitious and talented people with skills not only in the NPL field.”

And Viktor Levkanic, Investment Director of APS, commented that: “We have been actively participating in the NPL transactions in Croatia since the beginning of 2015, when the very first sizable transaction came to the market. During this time, we have built up our local market knowledge, understanding and relationships. We believe in the market, see a strong potential for further investment opportunities and also trust the long-term performance of the real estate market and the economy overall.”

The Ostermann & Partners team was led by Managing Partner Mojmir Ostermann, supported by Partners Mila Selak and Vjekoslav Ivancic.

The Schoenherr team was led by Bucharest-based Partner Matei Florea. The firm did not reply to our inquiry on the matter. 

Weinhold Legal, Divjak, Topic & Bahtijarevic, and Selih & partnerji have advised on the merger of entities within the Olympus group, as Croatia’s Olympus d.o.o and Slovenia’s OLYMPUS SLOVENIJA d.o.o. merged into the Czech entity, Olympus Czech Group, s.r.o., clen koncernu. The merger was registered on March 1, 2017.

The Weinhold Legal team in the Czech Republic was led by Managing Attorney Ondrej Havlicek and Partner Martin Lukas, the DTB team in Croatia by Lawyer Martina Kalamiza and Trainee Daniela Marasovic, and the Selij & partnerji team in Slovenia by Partner Natasa Pipan Nahtigal and Senior Associate Jera Majzelj.

Tax services were provided by EY under the lead of Rene Kulinsky and Martin Hladky.

Image Source: olympus-custom-printing.com

Motieka & Audzevicius has advised Lithuania’s KG Group on the preparation and negotiation of financing agreements from the European Bank for Reconstruction and Development for a credit facility to be used for development of the company’s business in Belarus.

M&A describes the KG Group as “one of the leading agriculture groups in Lithuania,” and says that “the transaction will allow the client to improve the technology and expand both products’ portfolio and quality. The transaction shall benefit the consumers as the client may provide a wider range of products.”

Cobalt has advised Santa Monica Networks Group on the sale of its Estonian and Finnish subsidiaries to the Elisa Corporation telecommunications company and its Latvian and Lithuanian subsidiaries to Livonia Partners. Bird & Bird advised the Elisa Corporation and Ellex Raidla advised Livonia Partners on the transaction, which is expected to be completed by May 1, 2017.

Cobalt describes Santa Monica Networks, which was founded in 1989, as “a regional market and expertise leader in supporting core networks, data security, [and] unified communications, as well as data centers.”

The Cobalt team in Estonia consisted of Senior Partner Sten Luiga, Partner Peeter Kutman, Senior Associate Ott Aava, and Associates Mattias Tammeaid, Madis Reppo and Liina Saaremets; in Latvia of Managing Partner Lauris Liepa and Associate Diana Zepa, and in Lithuania of Managing Partner Irmantas Norkus, Partner Juozas Rimas, and Associate Julija Timoscenko.

Bird & Bird did not reply to our inquiries on the matter.

Editor’s Note: After this article was published, Ellex Klavins informed CEE Legal Matters that its team consisted of Partner Zinta Jansons, Senior Associate Martins Gailis, and Associates Reinis Sokolovs and Janis Gavars, and Ellex Valiunas announced that its team consisted of Associate Partner Robertas Ciocys and Senior Associate Povilas Junevicius.

Tria Robit, working on behalf of Italian undertaking Ferrero S.P.A., has successfully opposed the international registrations by Ukrainian undertaking Dochirnie pidpryiemstvo “Kondyterska korporatsiia Roshen” with the word “Roshen” in them – subsequently designated to Latvia – on the basis that they created a likelihood of confusion with Ferrero’s earlier international “Ferrero Rocher” figurative trademark registration and improperly imitated a well-known trademark. 

On December 2, 2016 the Board of Appeals of the Patent Office of the Republic of Latvia heard the appeal, and after examining the case materials, found that they were not confusingly similar according to Article 7 part 1 paragraph 2 of the Trademark Act, but found that, under Article 8, there was sufficient evidence to conclude that the “Ferrero Rocher” trademarks were well-known among Latvian consumers before the designation date of the contested international trademark registrations, and thus agreed “that the dominant element of the contested marks ‘Roshen’ may be perceived as an imitation of well-known mark ‘Ferrero Rocher’.”

According to Tria Robit, “in accordance with above-mentioned, the Board of Appeals decided to satisfy oppositions filed by … Ferrero S.P.A. against [the challenged] international trademarks registrations … and dismiss international trademark registrations protection in Latvia.” 

The Tria Robit team was led by Senior Lawyer Bronislavs Baltrumovics.

Working alongside global counsel Mannheimer Swartling, Sorainen has advised Providence Equity Partners on the acquisition of the Baltic businesses of Swedish media holdings Modern Times Group. Allen & Overy advised Providence on financing for the acquisition. Cobalt — working alongside Sweden’s Hamilton law firm — advised the Modern Times Group on the deal.

The total disclosed value of the acquisition in all three Baltic States is EUR 115 million — equivalent to 12 times FY 2016 EBIT. Closing is subject to regulatory approvals.

Providence Equity Partners is a global asset management firm with USD 45 billion in assets under management across complementary private equity and credit businesses. It focuses on media, communications, education, and information investments.

Among the MTG-owned businesses acquired by Providence are: Three TV channels in Estonia (TV3, TV3+, TV6), five TV channels in Latvia (TV3, TV3+, TV6, Kanals 2, LNT), three TV channels in Lithuania (TV3, TV6, TV8), the pan-Baltic pay TV company Viasat, and nationwide commercial radio stations. According to Sorainen, “MTG Baltics is the leading pan-Baltic Media House with free TV and pay TV broadcasting assets together with complementary radio assets and strong digital presence. MTG Baltics has a 20 year history of operating in the Baltics, with a strong track-record of primarily organic growth.”

According to Allen & Overy, “the sale reflects MTG’s ongoing transformation from a traditional national broadcaster into a global digital entertainer, capitalizing on rapid changes in consumers’ media consumption habits. MTG will use the proceeds from the sale to transform the company further.” 

Karim Tabet, Managing Director at Providence: “MTG’s Baltic broadcasting businesses are all leaders in their respective areas and we’re excited to partner with such a talented group of people to grow the company together. After our acquisition of Bite in 2016, this transaction highlights Providence’s continued commitment to investing in the Baltic region.”

Robert Sudo, Managing Director at Providence, added: “Lithuania, Latvia and Estonia are all among the fastest growing countries in the EU. The business friendly environment combined with a highly skilled workforce make the Baltics an exciting region for us. We are looking forward to working together with MTG Baltic’s management and employees over the coming years.”

Jorgen Madsen Lindemann, MTG President & CEO, commented: “We have been in the Baltic region for two decades, and our very dedicated and professional colleagues have built a successful business here. I would like to take this opportunity to thank our local team for an extraordinary performance over the years. We are on a journey to build an even stronger presence in the global digital arena, and I am happy that we have found a buyer that shares our view of the potential of the Baltic businesses. Our Baltic colleagues can look forward to a new era that taps the full possibilities of the Baltic media market.”

Sorainen’s team was led by Partners Laimonas Skibarka and Eva Berlaus and included Specialist Counsel Stasys Drazdauskas and Mantas Petkevicius, Senior Associates Janis Bite, Jonas Kiauleikis, and Juulika Aavik and other lawyers. Sorainen also advised Providence on its 2015 acquisition of Bite, the Lithuanian and Latvian mobile operator (as reported by CEE Legal Matters on December 29, 2015).

The Allen & Overy team was led by London-based Partner Timothy Polglase.

The Cobalt team advising MTG included Lithuanian-based Managing Partner Irmantas Norkus, Partner Juozas Rimas, and Associate Evaldas Petraitis, Estonian-based Partners Martin Simovart and Peeter Kutman and Senior Associate Karl Kull, and Latvian-based Managing Partner Dace Silava–Tomsone and Senior Associate Elina Locmele.

Editor’s Note: After this article was published, in October 2017, the Fort law firm announced that the deal had closed, and that it had worked alongside Sweden’s Hamilton law firm, the global counsel for MTG, and in liaison with Latvia’s Skopiņa & Azanda firm, in providing “full competition and regulatory support and advice to MTG throughout the process,” including: (1) screening potential and actual bidders for potential competition and regulatory risks before and during the auction process; (2) providing competition law advice for the appropriate handling of potentially sensitive information during the buyer’s due diligence process and between signing and closing of the transaction; (3) providing support and advice in obtaining the regulatory/government approvals from the Cabinet of Ministers in Latvia and from the Radio and Television Commission of Lithuania; and (4) providing support and advice in obtaining merger clearances from the Latvian and Lithuanian Competition Councils.

The firm’s pan-Baltic team was led by Partner Rene Frolov and included Partner Andrius Mamontovas and Associate Aiste Samuilyte-Mamontove in Lithuania, working alongside Skopina & Azanda Managing Partner Ieva Azanda in Latvia.