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Valiunas Ellex has advised Cognizant — a global leader in IT, consulting, and business process outsourcing services — on its acquisition of a majority stake in the Vilnius business services center of Storebrand, a Norwegian insurance and pension fund management company.

Cognizant operates in the United States, Europe, and South East Asia. The company manages over 100 business services centers around the world, which employ over 219,000 people.

The Valiunas Ellex team included Partner Dovile Burgiene, Senior Associate Alina Burlakova, and Associate Vilte Kristina Steponenaite.

Valiunas Ellex did not reply to our inquiry about counsel for sellers on the deal.

Editorial Note: After this article was published, Tark Grunte Sutkiene (TGS) informed us that it had advised Storebrand on Lithuanian aspects of the deal, working alongside the Norwegian law firm Haavind. The TGS team was led by Senior Associate Aurimas Pauliukevicius.

Glimstedt’s offices in Latvia, Lithuania, and Estonia have advised Hong Kong-based private equity investment fund Meridian Capital (based in Hong Kong) on its purchase of all shares of SIA Rigas Piensaimnieks (which includes AS Rigas Piena Kombinats, AS Valmieras Piens, and AS Premia Foods, and is collectively known as Food Union) from the Darby investment fund.

The acquisition was successfully completed on October 29, 2015. Meridian Capital previously made investments as a financial partner of the business group, .

According to Glimstedt, the firm assisted with “structuring of the transaction, including tax aspects, legal due diligence, receiving of merger approval from the Latvian and Lithuanian Competition authorities, contract negotiations and completion of the transaction.”

The Glimstedt team consisted of Partners Ivars Pommers and Inita Jurka, Senior Associate Karlis Ronis, supported by Associate Beata Plocina.

“The process of receiving consent from the Latvian and Lithuanian Competition Councils we consider to be very successful considering the fact that two dominant market participants were permitted to merge without any remedies or conditions,” said Ronis.

“Food Union has ambition to strengthen its position in the Latvian and Baltic markets, as well as to capture other potential export markets, including those outside the European Economic Area, for example, in China,” added Pommers. “The successful purchase of Rigas Piensaimnieks is an important step to become the leading Baltic dairy holding company. This results in offering of a broader product portfolio, as well as provides the necessary resources (product supply capacity, human resources, scale of production) to achieve this desired development goal.”

Glimstedt did not reply to an inquiry about the identity of the firm advising Darby on the deal.

Dentons has advised Italian wind energy operator ERG Renew on a PLN 177 million refinancing for EW Orneta 2 (which operates a 42 MW wind farm in Radziejow, in central Poland), from ING Bank Slaski and Pekao S.A. The banks were advised by Clifford Chance.

Dentons provided comprehensive legal advice on the transaction, including negotiation of the facility agreement and security documents and preparation of a due diligence report. The refinancing transaction was supervised by Dentons Partner Mateusz Toczyski. Senior Associate Jakub Wieczorek, and Associate Krzysztof Mrozik advised on the financing aspects, while Counsel Tomasz Janas and Associate Malgorzata Bluszcz assisted ERG Renew with the due diligence and regulatory issues.

 “This is another successful project completed for ERG Renew, who we have worked for since 2013,”  said Toczyski, Head of Dentons’ Banking and Finance practice in Poland and Europe. “Our work was appreciated not only by the client – ERG – but also by the bank providing the financing –ING Bank Slaski – with whom we have carried out numerous wind farm projects.” 

Dentons also represented ERG Renew on its takeover of the Orneta wind farm construction project in summer, 2014 (reported by CEE Legal Matters on June 10, 2015).

Clifford Chance did not reply to our inquiry about the deal. 

ODI and Gessel have advised Polish investor Linetech Holding S.A in the Slovene privatization process for Slovenian MRO company Adria Airways Tehnika d.d., organized through competitive international public tender. By winning the two-phased structured bidding process, Linetech acquired all shares in Adria Airways Tehnika. The deal is valued at EUR 5 million. Schoenherr advised both the consortium of shareholders headed by the Slovenian Sovereign Holding, and Aerodrom Ljubljana.

The Share Purchase Agreement was signed on November 24, 2015. According to ODI, “the deal provides for a simultaneous signing and closing on the same day, foregoing the need for additional time window, since the Slovenian Competition Protection Agency has been notified of the takeover agreement ahead and has decided that no merger clearance is required.”

ODI, acting on behalf of Linetech Holding, provided due diligence on the target, competition analysis, corporate governance changes and supported Gessel in drafting and negotiating the agreement with Schoenherr, acting on behalf of the Slovenian Sovereign Holding. 

Marko Jazbec, President of the management board of SSH, was satisfied with the deal. “We are immensely pleased with the outcome of the sale process of Adria Airways Tehnika, d.d.,” he said. “We believe that company will obtain a new owner which will support its growth, further development and maintain good relations with all stakeholders of the company.”

Zmago Skobir, Managing Director of Aerodrom Ljubljana, commented as well. “Aerodrom Ljubljana invested into Adria Airways Tehnika with clear objectives – to retain the maintenance and repair activities at Ljubljana Airport and to ensure a bolder future development of Adria Airways Tehnika,” he said. “In the bidding process a recognized international provider was selected. We firmly believe that Adria Airways Tehnika, among users and experts known mostly for high professionalism of its employees, will be enriched by the new ownership.”

Finally, Piotr Kaczor, President of the management board of Linetech Holding, said that: “We are proud to announce our acquisition of Adria Airways Tehnika, d.d. Subsequently, we aim to grow and develop Adria Airways Tehnika, d.d. by investing in people, new technologies and equipment. Thanks to this merger our field of capabilities will become wider, enhancing support opportunities for the most popular aircraft types of: Boeing, Airbus, Bombardier, Embraer and ATR.”

The privatization of Adria Airways follows little more than a year after the privatization of one of its shareholders, Ljubljana Airport, which was acquired by Fraport AG, the Frankfurt Stock Exchange-listed airport (as reported by CEE Legal Matters on September 9, 2014). 

The ODI team was led by Managing Partner Uros Ilic and Senior Associate Katarina Skrbec, assisted by Senior Associates Lea Vatovec and Lea Pecek. Four other ODI Associates were also included in the due diligence team. Gessel’s transaction team was led by M&A Partner Marcin Macieszczak and Attorney Michal Bochowicz.

Schoenherr‘s team advising SDH and Aerodrom Ljubljana was led by Partner Marko Prusnik and Partner Eva Skufca, assisted by Attorney Branko Cevriz and Associate Lilit Zavasnik. 

Popovici Nitu Stoica & Asociatii has advised MedLife on its acquisition of the Prima Medical imaging center in the Romanian City of Craiova.

MedLife, which opened its doors in 1996, is the largest private medical operator in Romania. Its chain includes 13 multidisciplinary clinics, 10 monodisciplinary centers of excellence, 8 medical laboratories, 6 multi and monodisciplinary hospitals, 3 maternity hospitals, and 11 pharmacies throughout Romania (though primarily in the country’s capital, Bucharest). The team of 3,000 employees, of which 1,300 are medical professionals, offers services including clinical and laboratory testing services, medical imaging, reproductive medicine, hospital admission, and surgical interventions, to over 2 million patients annually.

Prima Medical has been one of the most important medical imaging centers in the Oltenia region for over 11 years. It reported a RON 4 million turnover in 2014. 

The PNSA team was led by recently-appointed Named Partner Bogdan Stoica, seconded by Senior Associate Irina Vasile, and supported by four other lawyers from the firm. In the past, PNSA advised MedLife in Societe Generale Asset Management’s 2009 share purchase, as well as in its 2010 acquisition of Policlinica de Diagnostic Rapid SRL. 

The seller of Prima Medical relied on in-house counsel only. 

Wolf Theiss has advised Indiana-based axle manufacturer Dexter Axle on its merger with the Vehicle Technology business unit of AL-KO KOBER SE (resident in Koetz, Germany), and January 1, 2016 rebranding into DexKo Global Inc. Germany’s Heuking Kuhn Luer Wojtek firm advised AL-KO KOVER.

In return for contributing its Vehicle Technology business unit, AL-KO will receive shares in the new company. 

According to Wolf Theiss, “after the merger the new company shall constitute in its specific market segment the largest axle manufacturerin the world with an annual turnover of around 850 Million Euros. AL-KO Vehicle Technology shall continue to control the European and non-American business from its headquarters in Koetz, while Dexter Axle will manage the North-American business from Elkhart.”

Wolf Theiss served as local legal counsel for Dexter Axle Company in Austria, Czech Republic, Poland, and Romania in relation to this transaction. The firm’s team was led by Bucharest-based Partner Bryan Jardine and Vienna-based Partner Michael Lind.

The HKLW team was led by Partner Ulrich Jork, and included Boris Durr, Marcel Grubel, Helge-Thorsten Wohlert, Frank Metz, Daniela Rinke, Ricarda Marschall, Peter Vocke, Christoph Nohles, Reinhard Siegert, Anita Bohn, Astrid Wellhoner, Judith Ney, Fabian Gerstner, and Astrid Luedtke.

Belarusian lawyer Karyna Sazanovich has been hired to head the legal practice of the IPM-Consult Group, where — according to the firm — she will be “responsible for the legal support of mergers and acquisitions, Legal Due Dilligence; creation of holding-type structures, corporate governance, legal support for the investment projects and international commercial arbitration.”

According to an IPM-Consult press release, “the main services of IPM-Consult Group include evaluation of all types of property, investment consulting, development of project documentation and business plans, legal support and holding of auctions to sell real estate, transport, machinery and equipment.”

“In IPM-Consult Group we have all necessary knowledge and skills to provide complex support for the largest investment and privatization projects in Belarus,” Sazanovich is quoted as saying. “IPM-Consult Group is the only consulting company in Belarus which provides full corporate, appraisal, and consulting support for clients.”    

Sazanovich, who worked at IPM-Consult for two years previously as Deputy Head under former Director Elena Telesh, returns to the firm after a year at the Sysouev, Bondar, Khrapoutski Law Office. She has also worked for three years at the Lexcom law firm in Minsk. She graduated from the Belarusian State University and Central European University (in Budapest), with a specialization in International Business Law.   

Cobalt’s Latvia office has advised Talfin Amsterdam Holding B.V. (a Netherlands-based real estate holding company) on the sale of an office building located at Brivibas street 151 in Riga to its key tenant Evolution Gaming for the amount of EUR 12.4 million. Klavins Ellex advised Evolution Gaming on the deal.

Founded in 2006, Evolution Gaming provides B2B Live Casino services to customers’ players via multiple channels and devices. 

Editorial Note: After this article was published, Klavins Ellex informed CEE Legal Matters that its team advising Evolution Gaming was led by Ilga Gudrenika-Krebs and Associate Henrijs Niedra. According to Klavins Ellex, the property consists of three office buildings and four land plots underneath.

The recently adopted Croatian Bankruptcy Act (“SZ”) sets out a new integrated pre-bankruptcy and bankruptcy regime. SZ has entirely replaced the previous bankruptcy act that was in force for 18 years, as well as provisions regulating pre-bankruptcy settlement proceedings prescribed under the Act on Financial Operations and Pre-bankruptcy Settlement.

It is expected that SZ shall accelerate pre-bankruptcy and bankruptcy proceedings and help to gradually eliminate illiquid companies from the market.

Changes to Pre-Bankruptcy Proceedings

Change of authority

One of the most important changes under SZ is that pre-bankruptcy proceedings will no longer be conducted before the Financial Agency (“FINA”) but will fall under the commercial courts. FINA will still be present in the proceedings, but it will now only provide some purely technical support to the courts.

New grounds for initiation of pre-bankruptcy proceedings

A clear distinction between the grounds for initiating pre-bankruptcy and bankruptcy proceedings has been stipulated. Pre-bankruptcy proceedings can be initiated only in the event of the imminent insolvency of a debtor (prijete?a nesposobnost za pla?anje) which shall be presumed in the following cases:

• if a debtor has one or more due and unsettled obligations recorded in the Register of Due Obligations kept by the FINA (“Register”) or;
• if a debtor has failed to pay salaries to its employees for more than 30 days from the date when salaries were last due or;
• if a debtor has failed to pay contributions and taxes related to salaries of its employees for more than 30 days from the date when salaries were last due.

Creditor’s right to initiate pre-bankruptcy proceedings

Along with the debtor, a creditor can also initiate pre-bankruptcy proceedings (provided it has obtained the debtor’s consent).

Changes to Bankruptcy Proceedings

FINA’s duty to initiate bankruptcy proceedings

One of the most important newly introduced provisions by SZ is an ex officio initiation of bankruptcy proceedings against companies whose accounts have been blocked for more than 120 days. Some statistics show there are approx. 20,000 such companies in Croatia at the moment.

In the event where a company’s account has been blocked for more than 120 days continuously, the FINA has a duty to initiate bankruptcy proceedings within eight days from the expiry of this period. According to the Croatian Ministry of Justice, the intention is to firstly initiate bankruptcy proceedings against companies without employees and whose accounts have been blocked for more than a thousand days continuously, and then by June 2016, to initiate proceedings against all other candidates qualifying for bankruptcy under SZ.

(Changes of the grounds for initiating bankruptcy proceedings

The grounds for initiating bankruptcy proceedings have been reduced to insolvency (nesposobnost za pla?anje) and over indebtedness (prezaduženost) (while illiquidity (nelikvidnost) has been left out).

Insolvency of a debtor is presumed in the following cases:

• if a debtor has one or more due and unsettled obligations recorded in the Register for more than 60 days or;
• if a debtor has failed to pay three consecutive salaries to its employee/s.

Further, a company is deemed to be over indebted when its liabilities exceed its assets.

Possibility to carry out business operations of the debtor

SZ has reintroduced restructuring plans and the possibility of the debtor continuing to operate its business during bankruptcy proceedings (both which were abandoned in the previous act). The continuation of debtor’s business operations is allowed for a maximum of one and a half years as of the day of the reporting hearing, unless the restructuring plan has been submitted to the court.

Rightful challenging of debtor’s actions

Under the old regulations, the creditor who challenged a legal action of a debtor had to bear all costs of such proceedings and then would share the benefit with other creditors. Under SZ each creditor has a right to contest legal actions of a debtor on its own account and at its own expense, and would then have priority in the settlement order if the actions are successfully challenged and the monetary benefit thereof is returned to the bankruptcy estate.

Changes to the sale of debtor’s assets

SZ brought further changes to the sale of debtor’s assets. Namely, unless decided otherwise by the creditors, debtor’s assets will most likely be sold within four rounds of an electronic public auction organized by FINA. At the first auction, debtor’s assets cannot be sold below three-quarters of their estimated value, at the second auction, debtor’s assets cannot be sold below one-half of their estimated value, and at the third auction, debtor’s assets cannot be sold below one-fourth of their estimated value. At the fourth and final auction, the starting price will be HRK 1.00 (approx. EUR 0,14).

Sale of real estate, ships, aircrafts, or rights entered in public records which are encumbered by a pledge, can be conducted exclusively within the bankruptcy proceedings, depriving the secured creditor of a possibility to initiate enforcement proceedings (as was previously allowed).

Changes to costs of the proceedings

SZ stipulates further changes to settlement of the costs of bankruptcy proceedings. The court shall, inter alia, order the shareholders and the members of the debtor’s supervisory board who failed to duly initiate bankruptcy proceedings to pay up to HRK 20,000 (approx. EUR 2,650) in advance as costs for the bankruptcy proceedings.

New announcement and delivery regime

SZ abandons the practice of publicizing documents in the Official Gazette replacing it with the announcement on the official website of the courts (e-Oglasna plo?a). Delivery of documents in the proceedings is considered to be perfected upon the expiration of eight days from the announcement of the documents on the respective website. Most of the documents (eg, proposals for the initiation of the proceedings, notifications and reporting of claims etc.) are to be strictly submitted in prescribed forms; otherwise, the court shall reject them as being inadmissible.

Bankruptcy of affiliated persons

A further interesting development is the introduction of Chapter X of the SZ relating to the bankruptcy of affiliated persons. In bankruptcy proceedings against two or more affiliated persons where the debtor has a dominant influence, the following is stipulated: a) one bankruptcy administrator will be appointed for all affiliated persons, b) unified creditors’ bodies deciding on the outcome of the joint bankruptcy proceedings will be established (creditors’ assembly and committee), c) one joint bankruptcy estate for all affiliated persons will be deemed to exist, d) the court of territorial jurisdiction for the debtor who has a dominant influence will be competent for the bankruptcy proceedings of all affiliated persons and e) all mutual claims between affiliated persons will cease to exist.

Lists of bankruptcy administrators

Bankruptcy administrators will be distributed into a “list A” and a “list B”. On “list A”, more experienced bankruptcy administrators eligible for more complicated bankruptcy proceedings will be listed, whereas on “list B”, less experienced bankruptcy administrators eligible for handling bankrupt companies having up to two employees will be listed.

By Ozren Ivkovic, Attorney at Law, Ozren Kobsa, Attorney at Law, Schoenherr

AstapovLawyers International Law Group has advised private investor Alexander Chernyak on his acquisition of CarPrice, and provided additional advice on CarPrice’s expansion into Kazakhstan, Belarus, and Azerbaijan.

According to an AstapovLawyers statement, “AstapovLawyers ILG team performed transactional legal support, including but not limiting to negotiations, preparation of the transactional documentation, as well as provided legal advice for CarPrice on regulatory requirements concerning light vehicles sale, customs, currency, tax legislation, and technical regulations, in connection with company’s expansion to the new markets.”

CarPrice is the market leading Russian used cars purchasing site, which links sellers of used cars with car traders. The service allows car owners to obtain an on-line estimate of the likely sale price and test it in the nearest CarPrice office.

AstapovLawyers reports that the Baring Vostok Private Equity Fund V. and venture fund Almaz Capital recently invested USD 40 million in CarPrice — which constituted the largest venture capital transaction in Russia since the spring of 2014.

The firm’s team was led by Partner Oleh Malskyy, supported by Almaty-based Counselor Maksim Uslistyi and Associate Konstantin Derbyshev.