Category: Uncategorized

ODI has advised a consortium of banks on the cross-border syndicated financing of the Don Don group — which was advised by Odvetniki Selih & partners — totaling EUR 60 million. Karanovic & Nikolic and Linklaters were also involved in the financing deal.

The financing package was meant to facilitate Don Don’s acquisition of Pekarna Grosuplje from Mercator that closed on September 30, 2015. On that deal, Jadek & Pensa advised Mercator while Don Don was advised by Law firm Miro Senica and attorneys. 

The consortium of banks consisted of SKB d.d. as the agent and five other banks: Banka Koper (Intesa Group), Unicredit Banka Slovenija, Societe Generale Srbija, Unicredit Bank Srbija, and the EBRD, as well as the KJK private equity fund from Finland — an existing minority shareholder of Don Don. The EBRD reported that it provided EUR 10.3 million of the total EUR 60 million in funding. 

Originally founded in 1993 as a small bakery in Slovenia, today Don Don is the leading industrial bakery in Serbia, and is active throughout the Western Balkans and Croatia. The company currently operates eight production plants and has 1,300 employees. In April 2014, KJK acquired a 25 per cent stake in the company, with the proceeds invested in further expansion.  

Pekarna Grosuplje, established in 1951, is one of the best-known bakeries in Slovenia. It became part of Mercator in 2008 and effectively operated as its in-house bakery since. Following the takeover of Mercator by Croatia’s Agrokor in 2014, Pekarna Grosuplje was earmarked as a non-core asset, but will continue to supply the retailer.

According to a EBRD statement, the financing package is meant to support the regional expansion of Serbian Don Don bakery through the takeover of Slovenia’s Pekarna Grosuplje. Don Don “will thus become a leading industrial bakery in the markets of the former Yugoslavia able to cater to major retailers as well as serving as a platform for further expansion in the region.” Miljan Zdrale, EBRD Agribusiness Head for South-Eastern Europe, said: “This is an important step towards the consolidation of a market suffering from fragmentation and inefficiencies. Bringing together two strong and well-established brands will be a win-win-situation for the companies, suppliers and customers. The loan package will not only finance the expansion of Don Don, but will also lead to a strengthening of corporate governance and operational processes.” 

Ales Mozetic, CEO and owner of Don Don, added: “The cooperation with the EBRD is of great significance for our company. The Bank’s support for our development is a confirmation that we are on the right path. I am sure that this is only the beginning of a long and successful cooperation.”

On the financing of the acquisition side, the ODI team advising the consortium of banks was led by Partner Branko Ilic and Senior Associate Lea Pecek, assisted by Senior Associate Suzana Boncina Jamsek, and Associates Ivo Grlica, Masa Drkusic, and Primoz Mikolic. On the Serbian part of the transaction, the ODI team was led by Partner Milos Curovic, assisted by Associate Iva Miscevic. ODI also instructed Linklaters on one undisclosed matter. 

Don Don was advised on the LMA standard syndicated loan facility agreement by a Odvetniki Selih & partnerji team led by Partner Mia Kalas, who was assisted by Attorney-at-Law Blaz Ogorevc. In addition, Kalas’ team negotiated and supervised the negotiation of the Slovenian security documents. Karanovic & Nikolic advised Don Don in the negotiation of security documents.

On closing the financed transaction, Jadek & Pensa and Miro Senica and attorneys provided legal advice to Mercator and Don Don, respectively. The Miro Senica team included Founding Partner Miro Senica and Partner Mojca Muha.

Jadek & Pensa could not be reached for confirmation and details.

Following six months of slow-track negotiations between Greece and its international creditors, an agreement between the parties on a new bailout program has now reached the finish line. In witness of the agreement, Greece’s government submitted at the negotiating table a list of overhauls and policy commitments to be implemented in consultation with the EC, ECB, and IMF, including, inter alia, major reforms in the current broadcast licensing procedure.

In an attempt to speed up and secure the direct applicability of the new regulatory framework in the media industry, the Minister of State announced the submission of a bill on broadcast licenses and the introduction of an international public tender procedure for the acquisition of television licenses in return for a fee for the acquisition and use of the relevant frequencies; the bill is currently placed under public consultation until late August. 

The Greek government actually proposes to topple a well-established 25-year practice in the sector and restore legality in the operation of TV channels, which have been broadcasting since their launch, back in the 90s, under the regime of “provisional licenses” and within a poor legislative framework and licensing process. With respect to requests for tenders (RFTs), although a law enacted in 2007 explicitly provided for the acquisition of television licenses through tenders, all tenders offered over the last eight years for national and regional broadcasts as well as terrestrial pay-tv services have either been frozen or were never implemented, confirming the quasi-legal state of operation in the Greek media industry.

The new regulatory framework sets stricter evaluation criteria and higher standards on the licensing procedure and the operation of digital television channels, providing for a transparent two-stage procurement and tendering process (shortlisting and RFT). The supervisory body of tendering will be the Greek National Council for Radio and Television (NCRTV), an independent administrative authority that supervises and regulates the radio and television market. Potential bidders must comply with minimum capital requirements, origin of wealth, tax record, and shareholding structure standards, and they must ensure integrity on the technical and program content side. 

In addition to regulating the licensing process, the Greek government eyes to restructure, through the enactment of the bill, the activities of the Hellenic Telecommunications and Post Commission (the national regulatory authority for the telecommunications and postal services market), ensuring its transparent and smooth operation and tackling long-standing monopoly policies in the Greek digital frequency management sector. To this end, the new legislative framework provides for the establishment of a subsidiary of ERT S.A. (the Hellenic Broadcasting Corporation public broadcaster), which will operate as a service telecommunications provider, securing a high-quality national network infrastructure, full digital coverage, and equal and fair network access terms within Greece. The presence of a new network provider will break up the current monopoly of DIGEA, which is, at the moment, the only carrier of Greek digital channels and sole participant in tenders for the acquisition of licenses with respect to terrestrial digital broadcasts. 

Although the Greek Government states that the new licensing scenery will boost full-time employment and secure low unemployment rates in the media market, television station owners have reacted to the implementation of the new regulations, arguing that the number of licenses to be issued and granted under the new regime will be reduced and current television stations will need to undergo the competition process anew, instead of being assessed through the implementation of a point system for existing television stations. In this respect, they threaten not to participate in the new licensing process, claiming that it imposes unreasonable financial demands against their business interests, leading the government to consider revoking their operating licenses.

The extent to which the government’s bill on broadcast licensing and tendering will end up as an antitrust policy safeguarding consolidation and stability in the sector or will, instead, serve unannounced plans of the government to ultimately gain complete control of the television landscape will be seen in the days following its enactment. Until then, it remains a bone of contention, triggering endless debates between the State and television owners and major shareholders.

By Panagiotis Drakopoulos, Partner, and Mariliza Kyparissi, Senior Associate, Drakopoulos

This Article was originally published in Issue 2.4. of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Software developers face a great many obstacles when seeking to protect their copyrights in Serbia. According to public records, only 40.22% of taxpayers controlled by the Serbian Tax Administration in 2014 used legal software.

The grim statistics come primarily from a lack of public awareness, inefficient sanctions, and understaffed state authorities. However, one major cause for concern is that the lion’s share of unlicensed software use lies not with private citizens, but within corporate structures. 

A copyright holder who detects infringement of its software is not completely without resort, however; there are several lines of defense which the copyright holder can explore, including – most prominently – the initiation of administrative, civil, and criminal proceedings against infringers. With recent reports of intensifying copyright protection in Serbia, these deserve a closer look.

Although it took quite a few years for the framework established by the Serbian Law on Special Measures for Protection of Intellectual Property to gain momentum, its framework gives active authority to the Tax Administration’s Software Infringement Supervision Department to perform software legality inspections on the premises of corporate entities, either in the line of duty or at the specific request of a copyright holder. Because one of the key objectives of this mechanism is to raise awareness, the Tax Administration in practice gives the software infringer the opportunity to buy a license during the inspection and thereby to avoid commercial offense charges. Notably, this is only possible when it is the Tax Administration (and not the copyright holder) that instigates the inspection.

The effects of these legality inspections have slowly grown over the years. To take 2014 as an example, 72.12% of software infringers have bought software licenses during an inspection, whereas 23.86% entered the process of acquiring the license post-control. Only 1.88% were charged for criminal offenses.

Certainly, before undertaking any action, a copyright holder may choose to offer a suspected infringer the chance to purchase the relevant software license. Given that the aforementioned opportunity for the infringer to avoid commercial offense charges by buying the software license during an inspection may be denied by the Tax Administration when such inspection is instigated by the copyright holder, this gives an initial offer to buy the software considerable weight.

The issue of unlicensed software use should not, however, be seen solely from the perspective of the software developer. For a company oftentimes unaware of the type, versions, updates, and legality of each program used in every piece of hardware on its premises, this issue can naturally be problematic. Lack of diligence in this respect risks not only the administrative sanctions, costs, and expenses which may arise in relation to the performed inspections, but also those of potential civil and criminal liability.

The diligence required becomes even more burdensome where companies hire independent contractors who use their own devices for the company’s benefit, or where the company’s employees use personal computers for work-related purposes. In these situations the issue of liability for unlicensed use of software on company premises is not as clear-cut. Additionally, this poses technical difficulties during any software legality inspections, as the inspections are limited to the property of the business entity, and inspectors cannot seize personal computers which are considered private property, even when these are located on business premises.

The civil liability angle has many degrees, given the broad definition of the Serbian Copyright Act, which states that any action in the sphere of exclusive copyright may qualify as copyright infringement. Most notably, a software copyright holder may, therefore, instigate civil litigation proceedings against an infringer and demand compensation for damages, using findings of previous inspections as critical evidence. Consequentially, the infringer may be ordered to pay an amount equal to a triple license fee for the infringing period. As this period may in practice span several years, this sanction may be quite severe. The copyright holder may also request that the court decision declaring that the infringer committed copyright infringement be publicized in the media, which can carry significant reputational risks as well.

Criminal liability chiefly revolves around the two criminal acts prescribed by the Serbian Criminal Code: unauthorized use of copyright-protected work (Article 199 of the Criminal Code), and software damaging (Article 298 of the Criminal Code), both of which may be sanctioned by up to 5 years imprisonment. For the corporate entity, however, the sanction of prohibition of further business activities due to criminal liability established under the Law on Criminal Liability of Legal Entities may be the most damaging. 

In conclusion, Serbian law unquestionably has the tools to tackle copyright violation, even though these tools may need further sharpening in order to provide copyright holders with a swifter avenue for redress. A much greater goal, however, appears to be that of proper prevention – raising awareness and promoting due care of the need to observe and respect copyrights, for the benefit not only of the copyright holders, but also of Serbian corporate culture as a whole.

By Miroslav Stojanovic, Partner, and Andjelka Todorovic, Associate, Wolf Theiss

This Article was originally published in Issue 2.4. of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Bosnia and Herzegovina has not fallen behind the trend of liberalization of the telecommunications market. The Federation of Bosnia and Herzegovina – the largest of the two entities making up Bosnia and Herzegovina – owns a majority of shares in two telecom operators: BH Telecom, in which it has a 90% share, and HT Eronet, in which it has a 50.1% share.

BH Telecom is the leading telecommunications service provider in the Federation of Bosnia and Herzegovina, and the possibility of its privatization has been a popular subject of conversation for years. While some claim that such a privatization would not result in anything positive, others believe that it is a necessary step for the operator to achieve the highest levels of profitability and efficiency.

In recent days, this issue has moved back into the spotlight, as the Government of the Federation of Bosnia and Herzegovina – in its 17th session, held on July 27, 2015 – adopted the Reform Agenda for Bosnia and Herzegovina for the period 2015-2018, establishing plans for reforms and envisaging a number of measures and projects aimed at economic recovery and sustainable economic growth. This document was adopted with the ultimate goal of fulfilling the conditions to apply for EU membership. The section of the Reform Agenda related to the business climate and to ensuring competitiveness provides for development of preliminary plans for BH Telecom’s partial privatization. As a result of the Agenda’s adoption, the public learned that BH Telecom might be privatized and began to speculate about who the potential buyer would be, which political parties would benefit from the privatization, and where the money from the sale would end up.

The issue of the privatization of BH Telecom is complex, and there are many arguments both for and against it. On the one hand, those who oppose BH Telecom’s privatization emphasize that its profits greatly contribute to the budget of the Federation of Bosnia and Herzegovina. Many also complain that the work of the operator is non-transparent and that it is controlled by certain political structures. It is further pointed out that users are in the most part dissatisfied with the quality of service, that a state operator should provide more favorable conditions than private operators (although this isn’t accurate), and, most importantly, that its profits have decreased in recent years.

Proponents of privatization claim that the sale of BH Telecom would result in the introduction of new technologies, improvement of the infrastructure network and service quality, and, ultimately, higher profits. Of course, the state would also benefit greatly from a successful private telecommunications service provider. 

BH Telecom’s representatives have repeatedly insisted that the company is not falling behind world standards and modern technologies, and that the decrease in profits can be attributed to the increased use of a number of applications that allow users to communicate via Wi-Fi networks, such as Viber, WhatsApp, Skype, etc., which at the same time offer a very good quality. However, this is a challenge which all mobile operators are faced with.

The mere fact that the issue of privatization of BH Telecom is mentioned in the Reform Agenda indicates that it is one of the major strategic issues of importance to the economic growth and stability of the Federation of Bosnia and Herzegovina, reflecting the importance and size of this company. As the Reform Agenda envisages the partial privatization of the company, the Government of the Federation of Bosnia and Herzegovina may have found a middle-ground solution. Partial privatization would provide an influx of fresh capital and the introduction of new technological, marketing, logistics, and organizational solutions, while at the same time keeping the company partially state-owned.

However, open questions in the Reform Agenda include what percentage of the company will be privatized and a timetable specifying when concrete steps will be taken towards privatization, since the Agenda declares only that by 2018 the preliminary plans have to be developed in order to prepare for BH Telecom’s partial privatization.

The media is already speculating about who the potential buyers of BH Telecom’s shares would be, though such speculations may be premature. We expect that it will take some time before we know what the conclusion to the continuing story of BH Telecom’s privatization will be.

By Emina Saracevic, Managing Partner, and Saida Porovic, Associate, SGL – Saracevic & Gazibegovic Lawyers

This Article was originally published in Issue 2.4. of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Albania has seen a boom of call center services outsourcing in recent years by a number of multinational companies. Foreign companies, mostly from Italy, have benefited from several advantages of outsourcing call center services in Albania, including attractive tax rates, low labor costs, flexible employment conditions, and highly qualified employees with advanced lan-guage skills in several foreign languages.

Moreover, Albania offers a favorable legal environment for foreign compa-nies to outsource TMT products and services, from the perspectives of data protection, intellectual property, and trade secrets protection. EU privacy legislation requires that personal data can be transferred only to third countries providing “adequate protection.” Albania is a member of the Council of Europe Convention for the protection of individuals with regard to automatic processing of personal data, and additional protocols and the Albanian law on Data Protection are fully consistent with EU legislation. 

However, in order to be covered from legal risks, foreign companies should ensure that their Albanian contractors comply with such legislation. For in-stance, during the period between March and July 2015, following a mutual cooperation agreement entered into with the Italian Privacy Authority in February of this year, the Albanian Data Protection Authority (DPA) investigated several call centers in Albania and fined thirty of them due to non-compliance with Albanian data protection legislation. Out of all non-compliant call centers, only one had notified the DPA that it would be pro-cessing personal data before starting to do so. Most of them were not aware of the law or the legal requirement. 

In compliance with EU legislation, the Albanian Personal Data Protection Law applies to personal data processing by controllers located in Albania, as well as controllers that are not located in Albania but who exercise their activity through the use of equipment situated in Albania. In such cases, the controller must appoint a representative located in Albania. 

The provisions of the law with respect to controllers apply to their representatives as well. In order to ensure legal compliance and minimize privacy risks, foreign companies should consider the following requirements: (1) their local contractors have duly notified their activity to the Albanian DPA; (2) they have implemented adequate technical and organizational measures to ensure the security and confidentiality of the data, such as: clearly defined functions among the organizational units and restricted access to personal data only for the purpose of fulfilling their duties, confidentiality declarations signed by employees, internal privacy policies and procedures, restricted access to the environment where the data is collected and kept, and rules for the return and/or permanent destruction of the data as per defined retention periods; and (3) a signed data processing agreement, in case the outsourcing of products and services includes the processing of personal data.

In addition, the applicable data protection legislation requires that direct marketing through phone calls, e-mails, or other communication means may be performed only upon prior consent from the data owners, which must be documented and evidenced. 

An additional guarantee for foreign companies outsourcing in Albania is the legislation in force on the protection of intellectual property, privileged information, and trade secrets. Intellectual property legislation provides a comprehensive framework for the protection and enforcement of IP rights, including patents/utility models, industrial design, trademarks, and geographical indication, as well as copyright and related rights. According to the Albanian Labor Code, employees have a confidentiality obligation regarding production or trade secrets of which they have been made aware during their employment. Moreover, the Law on Commercial Companies defines trade secrets and provides for liability of company management for damage caused due to disclosure of trade secrets. On the same note, infringement of IP rights, trade secrets, and privileged information constitutes a criminal offence, punishable under the Albanian Criminal Code. Nevertheless, it is highly recommended that the above matters be clearly and carefully stipulated in the contractual terms of the agreement with the local company. 

The contract terms may be enforced either by Albanian courts or in foreign jurisdictions. The enforcement of a foreign court’s judgment in Albania may be sought after it has been recognized by the Court of Appeal. While examining the request for recognition of a foreign court’s judgment, the Court of Appeal does not review the merits of the case but checks only compliance with certain procedural principles, such as the competency of the court that has issued the judgment, the due notification of the defendant, whether a different judgment between the same parties with the same object and reason has already been issued by the Albanian courts, whether a lawsuit on the same matter was filed before the Albanian courts prior to the foreign court’s judgment becoming final, and so on. 

Currently, outsourcing of TMT products and services is regarded as a growth driver for foreign investment and increase of employment in Albania. That said, in order to better protect their interests and maintain a high quality of service, foreign companies must seek and obtain a deeper knowledge of the Albanian legal system before selecting their Albanian contractor.

By Ekflodia Leskaj, Partner, Drakopoulos

This Article was originally published in Issue 2.4. of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Valiunas Ellex has advised lead managers Barclays, BNP Paribas, and HSBC on Lithuania’s recent successful October 2015 issuance of 10 and 20–year Eurobonds, each of EUR 750 million, which the firm describes as “a new milestone in the country’s borrowing history.” Sorainen advised Lithuania on the issuance (as reported by CEE Legal Matters on October 20, 2015).

The ten-year EUR 750 million Eurobond has the lowest coupon in the country’s history, at 1.25 per cent. It is also the largest Lithuanian Eurobond issuance of that duration in the euro market. The twenty-year EUR 750 million Eurobond with a 2.125 coupon is the country’s first Eurobond issue.

“Lithuania has borrowed a large amount for a long duration by issuing a dual tranche Eurobond for the first time,” said Lithuanian Finance Minister Rimantas Sadzius. “The decision reflected investors’ demand and our borrowing strategy. The long duration will allow us to achieve a smooth debt profile and lock into low interest rates for a longer period. Low interest rates will help to refinance old debts and to redirect savings on interest to public needs.”

The Valiunas Ellex team consisted of Partner Gediminas Reciunas, Associate Partner Joana Baublyte, and Senior Associate Laurynas Narvydas.

Drakopoulos has represented the Intrakat Group in what it described as a “major construction dispute” with Vinci Construction. The Greek firm worked together with a French team from Squire Patton Boggs, while Vinci Construction was represented by Cabinet Gregoire.

The EUR 14.5 million dispute involved the construction of the Le Mans football Stadium in France and was, in the end, settled out-of-court between the parties. While complete details of the dispute were not provided, Intrakat and Vinci announced in January 2009 that they had signed a contract “for the construction of the steel roof of the Le Mans football team stadium, in the city of Le Mans, France, valued at EUR 6.3 million for the first phase of the project.” The design and construction of the steel roofing was to be completed at Intrakat’s steel and electromechanical construction factory in Larissa, which is one of the most significant plants in Greece.

The Drakopoulos team assisting Intrakat in the litigation in France consisted of Senior Partner Panagiotis Drakopoulos and Senior Associate Mariliza Kyparissi. The French Squire Patton Boggs team working alongside Drakopoulos included Partner Antoine Adeline and Senior Associate Alexandre Le Ninivin.

Vinci Construction was represented by Jerome Gregoire of Cabinet Gregoire.

Image Source: mmarena.com

Clifford Chance has advised Hillwood Europe, the investment division of the US-based Hillwood Investment Properties for Europe fund, in a joint-venture acquisition with 7R Logistic S.A. of 3 warehouses located in Gdansk-Kowale. The value of the transaction was EUR 30 million. 7R Logistics was advised by the Kurek Kosciolek i Wojcik law firm.

7R Logistic Park in Kowale near Gdansk is a complex of three modern warehousing buildings with a total area of over 60,000 square meters. The warehouses are located in the immediate vicinity of Poland’s S6 express road and the Tricity Beltway, 5 km from Gdansk’s Lech Walensa Airport, 10 km from the Port of Gdansk, and 15 km from the Gdansk city center. Currently, commercial premises in the park are leased to companies from the FMCS, logistics, TCLF, and electronics sectors, as well as companies from the chemical industry.

The Clifford Chance team handling the transaction was led by Partner Daniel Kopania and includes Counsel Bartosz Kaniasty and Associates Joanna Biedka and Jedrzej Palka. Tax aspects of the transaction were handled by Counsel Tomasz Szymura.

The Kurek Kosciolek i Wojcik law firm advising 7R Logistic consisted of Senior Partner Aleksander Wojcik, Partner Edyta Stepien, and Associate Aleksandra Morawska.

Image Source: eurobuildcee.com

Russian Corporate/M&A lawyer Evgenia Teterevkova has joined Dentons’ St. Petersburg office as a Partner in the Corporate and M&A practice group.

Teterevkova specializes in the fields of mergers & acquisitions, joint ventures, transaction structuring and financing, and antimonopoly regulation. She is also experienced in issues pertaining to labor law. 

Teterevkova moved to Dentons from Borenius, where she spent the past two and a half years. She has also worked at Linklaters, Salans, and Mannheimer Swartling. She graduated from the St. Petersburg State University in 1999.

In a statement released by the firm, Victor Naumov, Managing Partner of Dentons’ St. Petersburg office, is quoted as saying: “this year has brought our Firm a host of massive changes. For us, it’s important to meet the needs of our clients to the greatest extent possible, so the arrival of Evgenia marks yet another step towards a significant strengthening of our market positions.” 

In that same statement Teterevkova is quoted as commenting: “I am thrilled to be joining one of the most dynamically-growing and promising law firms in Russia. For me, it is a tremendous honor to become part of this outstanding team, distinguished for its impeccable reputation.”

Skadden is advising Roust Trading Limited on a U.K. court-sanctioned scheme of arrangement to restructure two series of eurobonds issued by its subsidiary Russian Standard Finance S.A. to fund related loans to Russian Standard Bank.

According to Skadden, “this is the first time an English scheme of arrangement has been used to implement a restructuring to address capital adequacy issues for a Russian bank.”

Roust Trading is a Bermuda-based luxury-goods import company. The company distributes alcohol in Russia, including the Smirnoff, Bacardi, Johnnie Walker, Gordon’s, Bailey’s, Metaxa, and Russian Standard Vodka brands. The company also offers banking services.