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Squire Patton Boggs has advised INEOS Enterprises on the agreement it has reached in principle to sell INEOS Styrenics, its Expandable Polystyrene Business, to Synthos S.A. for EUR 80 million. White & Case advised Synthos on the deal, which is likely to complete in the second half of 2016, subject to customary regulatory approvals.

According to SPB, “INEOS Styrenics produces high quality Expandable Polystyrene (EPS) for the building, construction, and packaging industries at manufacturing sites at Wingles and Ribecourt in Northern France and Breda in the Netherlands.” The three production sites are supported by the company’s technology center in Breda, which is a purpose-built research, development, and product testing facility, including a research laboratory and pilot plant facilities. Customer Service, Logistics, and Finance groups are also located in Breda. The business employs approximately 250 people who will transfer as part of the deal.

“The combination of INEOS Styrenics with Synthos will accelerate growth and deliver additional benefits to customers of both companies,” said Ashley Reed, CEO of INEOS Enterprises, an an INEOS press release, “giving them access to expanded technologies and an enhanced product portfolio. It will also offer new opportunities for employees who will be part of a company that is focuses on, and strategically committed to the long term future of the expanded polystyrene market.”  

Synthos is one of the largest manufacturers of chemical raw materials in Poland. The company was the first European manufacturer of emulsion rubbers and is a leading manufacturer of polystyrene for foaming applications. Synthos is traded on the Polish stock exchange with its headquarters located in Oswiecim.

“The aim of the acquisition will be to provide the highest quality expandable polystyrene to ensure that expandable polystyrene products remain the insulation material of choice for our customers.” said Tomasz Kalwat, CEO of Synthos.

The woodcock mating season has just ended and deer-hunting season has already begun.

Are officials allowed to accept an invitation to a hunting trip, or should they be paying the shooting fees and other costs? In connection with hunting activities there is often an overlap in professional and private spheres. It is common knowledge that some hunters tend to be quite competitive. An anonymous complaint against a hunting fellow is filed quickly. However, what might easily create the impression of frowned upon sweetening, “old boy networks” or even corruption in the case of inviting officials, might not always be a crime.

1. “Sweetening” of officials

Anti-corruption law is applicable even prior to any official tasks being carried out. Austrian anti-corruption law includes the so-called “sweetening” of officials (acceptance of an advantage by the official or the giving of an advantage to the official in order to carry out an undue influence).[1] “Sweetening” means the acceptance or giving of advantages in order to encourage officials to act in a more favourable manner towards them, and, thus, influencing the exercise of their work.[2]  There are numerous “advantages” one can offer as “sweetening”, such as an invitation to a hunting trip. In exchange, the hunting host might expect a more favourable exercise of the official’s discretionary powers, or for the handling of a case to be carried out more swiftly. The law provides for imprisonment of up to five years in this case.

It is important to note that “sweetening” does not require a causal connection between the (unlawful) giving of an advantage and the specific official act. In contrast to bribery, it is not relevant whether the official acts dutifully or not. “Sweetening” thus includes generally influencing the future exercise of an official’s powers or responsibilities, the official requesting an advantage, accepting an undue advantage, or agreeing to receive an advantage.

One of the subjective elements of the criminal offence is “the aim to influence the future exercise of the official’s powers or responsibilities”, thus the “intention to influence”. Gifts or advantages given out of genuine gratitude do in general not constitute a criminal offence. This is also relevant for advantages that are exclusively gained – only for private reasons. However, the relevant acts might constitute a criminal offence, if the advantages are obviously not exclusively based on a private motive. Thus, it is difficult in practice to assess the “motivation on which the advantage is based” and to provide relevant evidence.

When assessing the facts from a criminal law perspective, each individual case must be evaluated based on all relevant circumstances.[3]  The German Supreme Court stated that, inter alia, the credibility of a different motivation (other than influencing the exercise of the official’s powers and responsibilities), the official’s position, the conduct (secrecy or transparency) as well as the nature, value and number of advantages are relevant for the assessment under criminal law. The legislative materials to the Anti-corruption Amendment Act 2012 also refer to this decision. However, how can it be determined whether an act is the result of private or professional circumstances?

2. Does it constitute the criminal offence of “sweetening” if officials are invited to hunting trips?

The motivation of the involved parties is crucial for the assessment as to whether the elements of the criminal offence “sweetening” are fulfilled. To the extent hunters repeatedly go on hunting trips, invite each other to hunting trips on a regular basis, maintain friendly relationships beyond their hunting activities, and do not keep their hunting trips a secret, such circumstances do as such not indicate criminal behaviour as long as there is no actual “intention to influence” behind it. Even the legislative materials in connection with the Anti-corruption Amendment Act 2012 state explicitly that invitations to hunting trips based on the relationship between friends and reciprocity shall not be subject to punishment.

3. Conclusion

However, questions in relation to the motivation and purpose of an invitation addressed to an official are primarily a question of the assessment of evidence, which is reserved for the public prosecuting authority and criminal courts. Consequently, it is recommended to provide an in-depth assessment of invitations among long established fellow hunters, taking criminal law into consideration, especially if officials who are exposed to the public are involved.

[1] Sections 306 and 307b Criminal Code (StGB).

[2] Report of the Justice Committee, notes to the protocol of the National Council 24th legislative period, p 10.

[3] Information leaflet to the Anti-corruption Amendment Act 2012 (KorrStrÄG 2012), Ministryof Justice, p 52; notes to the protocol of the National Council 24th legislative period, p 10.

By Heidemarie Paulitsch, Counsel, and Michael Lindtner, Associate, Schoenherr

CMS has advised a joint venture of DDM AG and an unnamed global investment manager on the acquisition of VR Leasing Group’s Hungarian subsidiary, Lombard Penzugyi es Lizing Zrt. (“Lombard Lizing”), accomplished via an acquisition of Lombard Lizing’s NPL and subpar retail portfolio of auto loans. Hogan Lovells advised VR Leasing Group — which has held a majority share of Lombard Lizing since 2000 — on the sale.  

The DDM Group is a multinational investor and manager of distressed debt with particular focus on distressed asset portfolios in Eastern Europe, handling approximately 2.3 million contracts with a value of around EUR 2 billion.   

The CMS team advising the joint venture was led by Partner Erika Papp and Senior Counsel Eszter Torok, assisted by Adrienne Kraudi, Gabor Gelencser, Arpad Lantos, and Krisztina Nascso (all from CMS Hungary), Thomas de la Motte and Heino Busching (from CMS Germany) and Patrick Donegan (CMS UK), among others.  

The Hogan Lovells team was led by Munich-based Partner Nikolas Zirngibl, who was supported in Munich by Partners Heiko Tschauner and Christian Herweg, Counsels Andreas Thun and Falk Loose, and Associates Peter Lang and Thomas Ressmann, in London by Partner Paul Mullen and Senior Associate Gert Raig, and in Budapest by Partner Sandor Bekesi, Counsel Akos Kovach, Senior Associate Andras Multas, and Associates Zoltan Janosi and Gabor Koszo.

Image Source: vr-leasing-gruppe.de

Sorainen, acting together with Mannheimer Swartling, has advised Sweden’s Hilding Anders – the leading manufacturer of beds in Europe, Russia, and Asia – on its acquisition of the Lithuanian company Mingridas.

Mingridas operates in Jonava, where mostly local materials are used for manufacturing beds and spare parts. The company employs a team of over 120 woodworkers, carpenters, designers, and other personnel. Most of the company’s products are exported to Scandinavia.

Sorainen performed legal due diligence of the target and advised Hilding Anders on Lithuanian aspects of the transaction, including the share purchase agreement and closing of the deal. The firm’s team was led by Partner Algirdas Peksys and included Senior Associates Jonas Kiauleikis and Arturas Kojala.

The selling shareholders of Mingridas were not represented by external counsel.

White & Case has advised Jastrzebska Spolka Weglowa S.A. (JSW) and its subsidiary Spolka Energetyczna Jastrzebie S.A. (SEJ) on the PLN 190.4 million sale of 100% of shares in Przedsiebiorstwo Energetyki Cieplnej S.A. (PEC) to PGNiG Termika. DJBW Danilowicz Jurcewicz Biedecki i Wspolnicy advised PGNiG on the deal.

The JSW Group is the largest producer of high quality hard (type 35) coking coal and a major producer of coke in the European Union. In 2015, 16.4 million tonnes of coal were extracted from its mines. The company has been listed on the Warsaw Stock Exchange since 2011. 

For 40 years, PEC — which is located in Jastrzebie-Zdroj, in southern Poland — has been engaged in the creation, transmission, distribution and trade in heat. It sells 3 million GJ (gigajoules) of heat, produced in 14 facilities with a total installed power of 257.7 MW. It possesses a heating network of approximately 260km.  

The funds obtained by SEJ from the sale of the PEC shares will be allocated to SEJ’s ‘Energetyka 2016’ investment program — and in particular to finance the completion of the construction of a circulating fluidized bed.  

The White & Case team in Warsaw which advised on the transaction included Partner Marcin Studniarek, Local Partner Aneta Hajska, and Associate Anna Pawelec.

The DJBW team advised PGNiG Termika S.A. on the acquisition was led by Partner Ludomir Biedecki and Attorney at Law Rafal Kozlowski.

Czech JSK firm and Germany’s Honert & Partner have advised Inven Capital, a venture capital arm of CEZ, on its EUR 20 million investment in Tado. The transaction represents yet another outward investment from CEE into Western Europe.

Inven Capital invests in innovative cleantech firms in Europe and targets later stage growth opportunities with business models proven by sales and with significant growth potential. Tado is, according to JSK, “a European market leader in intelligent home climate control. The Munich-based late stage startup provides climate control services to households by controlling heating and air conditioning systems.

According to a JSK press release, Inven Capital stated that: “Tado has impressed us with its proven historical growth as well as its service oriented strategy and Inven Capital will support their further international expansion.”

Editor’s Note: After this article was published, JSK informed CEE Legal Matters that Tomas Dolezil had led the firm’s team on the deal, and that a Reed Smith team consisting of Partner Justus Binder and Associate Frank Mizera represented Tado on the deal.

Image Source: tado.com

Tark Grunte Sutkiene has provided legal assistance to SEB Bank Latvia regarding a long-term syndicated loan it provided along with Danske Bank to Linstow group enterprises. Cobalt advised the Linstow Group on the deal.

SEB — also acting as the agent — and Danske Bank each financed half of the EUR 76 million loan made to the Linstow Group companies to refinance the companies’ obligations in the Origo and Galerija Centrs shopping malls.

Tark Grunte Sutkiene reports participating in preparing the loan and refinancing agreements as well as preparing related security documentation, and it represented SEB in negotiations with Linstow Group on the transaction structure and provisions of the documentation. The firm’s team was led by Partner Inese Hazenfusa and Senior Associate Maris Liguts.

The Latvian Cobalt team consisted of Specialist Counsel Andrejs Lielkalns and Senior Associate Inga Tenisa.

Kambourov & Partners has advised BISAM on the Bulgarian part of its acquisition of FinAnalytica.

According to Kambourov & Partners, “BISAM is the leading provider of sophisticated digital solutions for portfolio analytics and its B-One platform is used by many of the world’s largest asset managers to evaluate and enhance their investment strategies and better service their clients.” The firm also reports that “FinAnalytica’s Cognity platform is the leading multi-asset class solution for market risk, portfolio construction and investment decision analytics.”

Finally, Kambourov & Partners, reports, “the two systems complement each other and enhance the solutions provided by BISAM to the global asset management industry, answering their growing need for unified performance and risk analytics.”

SPCG has advised the PRA Group on its acquisition of 99.73% of shares of DTP S.A., for a total amount of PLN 174.5 million (approximately EUR 39.5 million).

According to SPCG, the PRA Group — which has been present on the Polish market since 2014, and is listed on the Warsaw Stock Exchange — is “the world leader in acquisition and management of non-performing debt portfolios, [and its] parent company – PRA Group Inc. – is an American company listed on Nasdaq.” According to the firm, “the acquisition of DTP S.A. shares is part of the PRA Group’s long-term strategy to expand its presence on the Polish market.”

The SPCG team was led by Partner Artur Zapala, supported by Of Counsel Ewa Mazurkiewicz, Associates Agnieszka Kolodziej-Arendarska, and Agnieszka Zelek, and Junior Associate Hubert Andziak. SPCG Partner Wawrzyniec Rajchel was involved in proceedings before the President of The Office of Competition and Consumer Protection.

SPCG did not reply to our inquiries on the matter.

Schoenherr reports that Montenegro has prevailed in its investment dispute with MNSS B.V. and Recupero Credito Acciaio N.V. (both from the Netherlands) in an ICSID (AF) arbitration involving claims of over EUR 100 million. MNSS and Recupero Credito Acciaio (“Claimaints”), were represented by lawyers from Essex Court Chambers, CMS, and Harrison’s Partners.

According to Schoenherr, on May 4, 2016, the tribunal — composed of Andres Rigo Sureda (President), Brigitte Stern (Montenegro’s appointee), and Emmanuel Gaillard (Claimants’ appointee) dismissed a claim brought by MNSS and RCA in 2012, partly on jurisdiction, partly on the merits, and refused to award any damages.    

Claimants had, Schoenherr reports, “alleged multiple breaches of contract, the Montenegro-Netherlands BIT, and the Montenegrin foreign investment laws, claiming in excess of EUR 100 million.” The Tribunal found that it lacked jurisdiction over the contract and investment laws claims, dismissed all but one BIT claim on the merits, and awarded Claimants no damages. The Tribunal ordered that Claimants pay for the fees and expenses of the members of the Tribunal and for the expenses and charges for ICSID.  

Montenegro was represented by a Schoenherr team led by Vienna-based Partner Christoph Lindinger and Belgrade-based Partner Slaven Moravcevic, and including Vienna-based Partner Anne-Karin Grill and Belgrade-based Partner Jelena Bezarevic-Pajic, Vienna-based Counsel Leon Kopecky, Vienna-based Associate Michael Stimakovits, and Belgrade-based Attorney at Law Tanja Sumar. The Schoenherr team was also supported by David Pawlak, of David A. Pawlak LLC in Warsaw. 

Claimants were represented by Toby Landau, QC, and Dan Sarooshi, both of Essex Court Chambers, and a CMS team consisting of Partner Tim Hardy and Associates Csaba Kovacs and Aimee Cook, as well as Partner Goran Martinovic of Harrison’s Partners.