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On October 20, 2014, Poland’s Alior Bank acquired 97.9% of Meritum Bank from the EBRD, Innova Capital, and WCP Cooperatief, for a total of approximately EUR 84.5 million.

Greenberg Traurig handled the acquisition and advised on all aspects, including financing for the deal through an issuance of new shares. The sellers were advised by Weil.

We reached out to Slawomir Tomkiewicz, the Head of Legal at Alior Bank, with several questions about the deal and his selection of Greenberg Traurig as external counsel.

S.T.: For some historical reasons the rest of the shares are dispersed among 12 different entities, both legal and physical persons, domiciled both in Poland and abroad. It would be difficult to contact and negotiate with all of them at the same time. The sale process was initiated by the three main shareholders mentioned in your questions and for the sake of effectiveness we decided to focus on negotiations only with them. On the other hand the purchased stake gives Alior Bank a vast majority and the right to easily and smoothly proceed with further steps of planned integration. Of course Alior Bank is also interested in purchasing the shares belonging to those minority shareholders.

S.T.: Generally the selling shareholders were approached collectively, which helped a lot to negotiate and conclude the Share Purchase Agreement in a relatively short period of time. It would not have been possible if the selling shareholders had not employed one renowned investment bank as their financial advisor and one international legal firm (Weil) as their legal counsel. The coordinating role of Innova as the main selling shareholder is also worth mentioning and appreciating. Of course it is always a bit more difficult to find a compromise between four parties than it is between one seller and one buyer, but on the other hand it is nothing very unusual in M&A transactions practice.

S.T.: It is connected with a few different and complex circumstances, among which I can mention the expectations of the Polish Financial Supervision Commission as well as the capital position and current ownership structure of Alior Bank.

GT is almost a first choice legal firm for M&A processes in Poland. We worked with them on a few other deals in the past and really appreciate their impressive experience in these kinds of transactions. That brand guarantees the highest quality of services.

S.T.: Our internal legal team conducted only its own due diligence process. All transaction-related matters, especially the negotiations, were outsourced to GT. Of course I personally consulted the Management Board of Alior Bank on all crucial documents that had to be signed by Alior Bank, but all of them were also reviewed by GT.

S.T.: It is our intention to continue the co-operation with GT both at the stage of obtaining necessary administrative approvals and also then, during the further integration with Meritum Bank.

Raidla Lejins & Norcous acted in cooperation with Linklaters as legal advisers to the Latvian Privatization Agency in its sale of 75% of the shares of Citadele Bank to Ripplewood Advisors and a group of 12 international investors for EUR 74 million. Glimstedt, acting in cooperation with Slaughter & May, advised Ripplewood Advisors.

The deal was signed on November 5, 2014, and is expected to close in the first quarter of 2015 following approvals by financial, capital market, and banking supervisors. Upon closing, Ripplewood Advisors will own 22.4% of the shares and the 12 co-investors will have a 52.6% stake in the bank. The European Bank for Reconstruction and Development will retain its 25% share in the bank.

Bank Citadele was one of two institutions created from a good bank/bad bank split of Parex Bank, which was privately founded 1992 and taken over by the Latvian government in 2008 during the financial crisis. The bad bank assets remained with Parex (now Reverta). Bank Citadele is the largest local bank in Latvia, the third largest bank in Latvia in terms of attracted deposits, and the fifth largest bank according to the total amount of assets and loans issued.

Citadele operates a total of 42 branches and client service centers throughout Latvia. The Bank also has foreign branches and client service centers in Estonia and Sweden, and its international network  includes client service centers in Estonia and Lithuania, representative offices in Azerbaijan, Kazakhstan, and Ukraine, and Citadele Asset Management representative offices in Russia, Belarus, and Ukraine, as well as a subsidiary in Switzerland.

Ripplewood Advisors is an affiliate of Ripplewood Holdings, an American private equity firm founded in 1995 and based in New York City that focuses on leveraged buyouts, late stage venture, growth capital, management buyouts, leveraged recapitalizations, and other investments. The company’s main interests range from telecommunications to banking to entertainment. The firm manages more than USD 10 billion in capital.

The share purchase agreement for Citadele bank was signed on November 5, 2014.

Image source: JuliusKielaitis / Shutterstock.com

Tark Grunte Sutkiene has advised the Eesti Talleks Holding Group on its sale of a 50 per cent holding in the Adole Invest group, which is composed of the importer and dealers of Skoda and Porsche vehicles.

Eesti Talleks is an Estonian holding group of real estate, vehicle sales, and wholesale companies. The group consists of 10 companies and employs 260 people. Last year, the consolidated turnover of companies belonging to the Eesti Talleks group was EUR 76 million.

“Today we have reached an agreement to divest our share, which enables Eesti Talleks to focus on our strategic field of real estate development,” said Taavi Toots, Chairman of the Board of Eesti Talleks.

Tark Grunte Sutkiene Partner Rolan Jankelevitsh and Senior Associate Tanel Tark advised Talleks on structuring the transaction, preparing transaction documents and represented the client in negotiations and closing of the transaction.

Image source: Lucian Milasan / Shutterstock.com and tratong / Shutterstock.com

Avellum Partners has acted as legal counsel to ING Bank in connection with a USD 100 million sunflower oil pre-export loan facility to Myronivsky Hliboproduct Group — one of Ukraine’s leading agro-industrial companies.

According to an Avellum Partners statement, “the loan proceeds will be used for the purchase of sunflower seeds in the Ukrainian market and subsequent processing of sunflower seeds into sunflower oil for export.”

Glib Bondar, who led the Avellum Partners team on the deal, said: “We are delighted to continue assisting both ING and MHP in pre-export finance transactions …. It signifies our deep corporate finance expertise and builds on our long-lasting relationship with ING.”

Bondar was supported on the deal by Associates Olena Polyakova, Taras Dmukhovskyy, and Anna Melnychuk.

More than 20 of Central and Eastern Europe’s top business lawyers will come together at the InterContinental Vienna on the evening of December 3 for the 2014 CEE Legal Matters Summit, the first-ever dedicated gathering of CEE legal specialists in one place.

The event will bring together CEE professionals from many of the leading law firms in the world and General Counsel from a number of major multinationals and will revolve around an extended Round Table conversation about the state of the 24 Central and East European nations at the end of 2014. The discussion is expected to touch on the effect of the ongoing crisis in Ukraine and Western sanctions on Russia, the lingering financial crisis continuing to plague much of Europe, opportunities for investors, the future of international law firms in CEE, and changes to the legal and regulatory regimes across the region, among other subjects. A summary of the conversation will be published in a special issue of CEE Legal Matters magazine.

Participants in the 2014 CEE Legal Matters Summit will include:

• Ted Cominos (Partner, Edwards Wildman Palmer)
• Patricia Gannon (Managing Partner, Karanovic & Nikolic)
• Ron Given (Managing Partner in Zagreb, Senior Partner in Prague and Ukraine, Wolf Theiss)
• Denise Hamer (Partner, Richards Kibbe & Orbe)
• Michael Mullen (Partner, Head of CEE Legal, PriceWaterhouseCoopers)
• Hugh Owen (Senior Partner, Head of SEE Desk, Allen & Overy)
• Willibald Plesser (Partner, Co-Head CEE/CIS Group, Country Partner for Turkey, Freshfields Bruckhaus Deringer)
• Andras Posztl (Managing Partner in Budapest, DLA Piper)
• Helen Rodwell (Managing Partner in Prague, Head of Corporate Practice for CEE, CMS)
• Adrian Roseti (Managing Partner in Bucharest, Drakopoulos Law Firm)
• David Shasha (Senior Consultant, Watson, Farley & Williams)
• Jonathan Weinberg (Partner, Head of Banking & Finance for CEE and CIS, White & Case)
• Perry Zizzi (Partner, Dentons) 
• A select (and confidential) group of specially invited General Counsel and senior in-house counsel, representing multinational companies with operations throughout Central and Eastern Europe.

The 2014 CEE Legal Matters Summit is organized and hosted by CEE Legal Matters, the leading source of news and information for lawyers in Central and Eastern Europe. The editors of CEE Legal Matters plan to draw attention to the dynamism and opportunities in the region’s many legal markets. “From the financial crisis in Greece to the political upheaval and turmoil in Turkey, Ukraine, and Russia, the countries of CEE are always in the spotlight,” says Executive Editor David Stuckey. “But while those stories are important, they shouldn’t overshadow the many opportunities for investors in those countries, let alone the continuing success story that is Poland, the stability and growth of Austria, Slovakia, and the Czech Republic, and the remarkable potential of the Baltics, Balkans, and Romania. We’re proud to be covering this part of the world, and we’re excited at the opportunity to bring so many of its best legal minds together for the first time.”

For more details about the participants, the event itself, or about CEE Legal Matters, please contact Radu Cotarcea, at radu.cotarcea(@)ceelm.com.

A team from Squire Patton Boggs – Salkom International Association has successfully represented Imperovo Foods on a case before the Ukrainian Supreme Court which, with its conclusion, ended a 10-year dispute with the State South Western Railway in Ukraine over the ownership of an eight story office building in central Kyiv.

Imperovo Foods is a subsidiary of Avandgarco IPL, which publicly trades on the London Stock Exchange and is owned by Ukrlandfarming Group.

According to Squire Patton Boggs – Salkom, “the building at the center of the dispute was originally contributed by the State to the charter capital of an open joint stock company in 2002, and subsequently purchased and redeveloped by Imperovo Foods to be used as executive offices for the Ukrlandfarming Group. The State then challenged the ownership of the building, claiming that its contribution was an abuse of power and in breach of privatization law, and that ownership should revert back to the State.” The firm explained that it successfully argued that Imperovo Foods, as a third party bona fide purchaser, acquired the office building and that the transaction carried out by the State authorities was in accordance with the law.”

Court cases and appeals concerning the ownership of the building continued for almost ten years, with the plaintiffs including the Deputy Prosecutor General, Cabinet of Ministers, and the State South-Western Railway. In addition to Imperovo Foods, the defendants included the Ministry of Infrastructure of Ukraine, the State Property Fund of Ukraine, the Open Joint Stock Company “Leasing Company – Ukrtransleasing”, and the State Administrative Railway Transport – Ukrzaliznytsa.

This dispute culminated in the Ukrainian Supreme Court where State requests to review the case were dismissed, leaving the issue of property ownership settled in favor of Imperovo Foods.

The Squire Patton Boggs – Salkom team that represented Imperovo Foods included Yuri Dzera, Pavlo Lukomskyi, Victoria Klymiuk, and Peter Teluk.

“It has been a hectic couple of weeks preparing for these cases, but we are very happy with the result for our client,” said Teluk. “Just as importantly, I believe that a verdict against our client would have had a negative effect on the investment environment here in Ukraine. Our client is a subsidiary of a London Stock Exchange listed company who had nothing to do with the initial transfer of the building which was questioned by the State. Our client purchased, remodeled and occupied the building, then was forced to defend itself as a bona fide purchaser. If the court had ruled against our client, it would have established a very bad precedent.”

CMS has advised the Museum of Fine Arts in Bern on its acceptance of more than 1,500 works in the art collection of the late Cornelius Gurlitt, who left the collection to the museum in his estate.

The collection is especially controversial as it contains a number of pieces looted by the Nazis from their rightful owners in the years before and during World War II. CMS lawyers in Austria, Germany, and Switzerland provided extensive legal advice to the the Museum of Fine Arts’ Foundation in reaching an agreement with the Federal Republic of Germany and the State of Bavaria on the terms under which the Kunstmuseum can receive and display the collection. 

According to the firm, CMS and the Kunstmuseum Bern “joined together with Bern lawyer Marcel Bruelhart in the agreement, [following the] deliberation of complex issues before the adoption of the estate of Cornelius Gurlitt.” 

In the end, the Minister of State to the Federal Chancellor of Germany and Federal Government Commissioner for Culture and the Media, the Bavarian Minister of State for Justice, and President of the Board of Trustees for the Kunstmuseum Bern signed an agreement on dealing with the controversial legacy of Gurlitt. The three representatives issued a joint statement in Berlin that: “With the agreement, the Federal Government of Germany and Bavaria have duly considered their special historical responsibility in coming to terms with National Socialist injustice in finding the rightful owners of suspected Nazi-looted art in the Gurlitt legacy. The Kunstmuseum Bern too is prepared to take on the responsibilities tied to accepting the inheritance of Cornelius Gurlitt.”

Christoph Schaublin, the President of the Board of Trustees of the Kunstmuseum Bern Foundation, said that the Kunstmuseum was taken by surprise by the inheritance and that making a decision was not easy for the board of trustees.

“It did not trigger any feelings of triumph. That would have been totally inappropriate in face of the history overshadowing the collection. Ultimately, our concern is to clarify the issue of whether and how the Kunstmuseum Bern can do justice to the responsibility imposed on it by the bequest—an exceptionally complex responsibility: toward those who suffered terribly and whose anguish continues still through parts of the Gurlitt collection; toward those who make rightful claims after all this time; toward interested parties and the general public, which has a right to be informed about the history of how the collection came to be; toward the collection itself, which comprises valuable objects of art—it being therefore desirable that it remain intact as far as possible and be made accessible to the public—and not least also toward the Kunstmuseum itself, so that its reputation and economic stability are not endangered.”

According to Schaublin, the basic strategy outlined in the agreement with the Federal Republic of Germany and Bavaria is very important for the Kunstmuseum Bern: “Looted art or works of art suspected of being stolen by the Nazis will remain in Germany. At the same time, Bern will actively participate in the provenance research in close cooperation with the task force assigned for this purpose. The ultimate goal is to clarify the provenance of all the works of art in the collection and thereby the restitution of all looted Nazi art to its rightful owners. The board of trustees is convinced that, on the basis of mutual trust and in collaboration with Berlin and Munich, the best-possible solution has been found to

serve the interests of all parties and claimants. It is of course true that there is still much to be done and that we are only starting out on a long, mutual journey.”

The director of education and of culture for the Canton of Bern, Bernhard Pulver, lauded “the Kunstmuseum Bern’s painstaking assessment of the situation and its courage.”

CMS Austria Partner Bernhard Hainz played a critical role on the matter, along with CMS Germany Partners Winfried Bullinger, Gerd Seeliger, Hans-Christian Blum, and Wolf-Georg Freiherr von Rechenberg and Senior Associate Katharina Garbers-von Boehm, and CMS Switzerland Partner Beat von Rechenberg.

Image source: bern.com

White & Case has advised a large group of lenders including ING Bank NV, Credit Agricole Corporate and Investment Bank, and other mandated lead arrangers, and Bank of America Merrill Lynch as Facility Agent, on a new USD 1.55 billion revolving credit facility provided to MOL Group. Lawyers from Allen & Overy advised the MOL Group.

MOL is a leading international integrated oil and gas company headquartered in the Hungarian capital. It is the biggest company in Hungary and a blue chip firm on the Budapest Stock Exchange. It has operations in more than 40 countries, employs almost 30,000 people worldwide, and its exploration and production activities are built on more than 75 years’ experience in the hydrocarbon field. According to White & Case, the new facility is expected to be used for, among other things, refinancing MOL’s EUR 500 million revolving credit facility that expired in September 2014 and the USD 545 million revolving credit facility concluded in April 2013.

The White & Case team that advised the lenders on the transaction was led by Prague-based Partner Jonathan Weinberg, with support from Local Partner Gergely Horvath and Associate Tamas Eross (both in Budapest). Weinberg said of the transaction that: “We were very pleased to continue the Firm’s relationship with our banking clients, as well as with MOL, having successfully supported them on similar transactions for a number of years. Our advice on this new, very high volume MOL facility was built on cross-border collaboration between lawyers based in Prague and Budapest, underlining the strength of our network and English law capabilities in the Central & Eastern European region.”

Allen & Overy Partner James Graham and Counsel Attila Csongrady acted as drafting counsel on the deal, representing MOL. They were assisted by A&O Associate Rudolf Pfeffer.

Image source: Northfoto / Shutterstock.com

Dentons has advised AFI Europe, a leading European real estate development and investment company, on the EUR 83 million sale of AFI Palace Pardubice shopping center to Atrium European Real Estate. Clifford Chance advised Atrium European on the deal.

AFI Palace Pardubice, which opened in 2008, was the very first modern shopping mall in Pardubice, a city in central Czech Republic less than 100 km from Prague. According to a Dentons press release, the shopping center was: “designed by the renowned MYS Architects, [and] represents an urban style of architecture respecting the unique locality in the city center.” Of the 50,000 square meters total area in the shopping center, 20,000 square meters is occupied by more than 100 shops offering local and world brands. The shopping center’s current occupancy is over 95%, with a very powerful tenant mix including H&M, Deichmann, Intersport, Bata, Promod, and Sephora. The shopping center also contains a Cinema City multiplex, which has the only IMAX screen technology in the Czech Republic outside of Prague. It also hosts numerous cultural and entertainment activities. 

Doron Klein, CEO of AFI Europe Czech Republic, stated: “We are very happy to once again sell to Atrium a successful shopping mall in the Czech Republic. The completion of this transaction and the sale of the D8 logistics park to CTP less than a month ago demonstrate the success of AFI Europe’s strategy.” 

The Dentons team was supervised by Evan Lazar, Co-Chairman of the firm’s Global Real Estate Group. The transaction was led by Partner Oren Harpaz, who was assisted by Counsel Nir Assido, both working from the Frankfurt and Warsaw offices. Prague-based lawyers working on the project included Partner Jiri Strzínek and Associate Marketa Tvrda. Evan Lazar said: “This was the second transaction where AFI Europe and Atrium European Real Estate transacted together on the Czech property market. Back in 2011, we advised AFI and Avestus Capital Partners on the sale to Atrium of Palac Flora shopping center in Prague for EUR 191 million, which was the largest transaction of its kind on the Prague real estate market in that year and we are delighted to advise AFI once again on this similar transaction.” 

Clifford Chance advised Atrium European Real Estate on the acquisition. According to Clifford Chance, the acquisition “is in line with Atrium’s strategy to buy prime income-producing shopping centers in the Czech Republic, Slovakia, and Poland.” As a result of the AFI Palace deal, now almost 20 percent of Atrium’s total income-producing assets are located in the Czech Republic. 

In 2011, Clifford Chance advised Atrium on a similar acquisition, the prime shopping and office centre Palac Flora in Prague.

The Clifford Chance team was led by Partner Emil Holub, primarily assisted by Associates Milan Rakosnik and Michal Pivarci and Junior Associate Eliska Chalupova.

Gessel has provided what it calls “comprehensive legal services” in association with the initial public offering of Skarbiec Holding and admission of its shares to trading on the regulated market of GPW, the Warsaw bourse.

Skarbiec Holding is the owner of Skarbiec TFI, which Gessel describes as “one of the most recognizable names among asset management societies in Poland.”

The share offering involved sale of shares by Skarbiec Holding Limited, an affiliate of the Enterprise Investors fund. At the same time, Gessel advised on the implementation of two incentive schemes involving shares from the new issue for key management personnel of the Skarbiec group.

Gessel’s team was led by Partner Leszek Koziorowski, and day-to-day work was led by Managing Associate Krzysztof Marczuk. Other members of the Gessel project team included Trainee Magdalena Szeplik and, for the incentive scheme component, Managing Associate Michal Boryczka and Trainee Emanuel Koska.