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Redcliffe Partners has advised the EBRD on Ukrainian law aspects of its USD 85 million financing to Myronivsky Hliboproduct (“MHP”), part of the MHP Group, which is one of the largest agricultural producers in Ukraine. According to Redcliffe Partners, “the loan extended to MHP is one of only a few new financings in the agricultural sector of Ukraine accomplished over the past year.” Linklaters Warsaw advised the EBRD on English law aspects of the deal.

MHP plans to use the proceeds of the EBRD loan for the expansion of the group’s farming activities as well as for the launch of a new plant for soy processing.

Redcliffe’s team advised EBRD on the Ukrainian law aspects of the Loan Agreement, including drafting the Ukrainian security documents, carrying out a limited scope due diligence of certain MHP entities, and reviewing English law security documents from a Ukrainian law perspective. 

The Linklaters team was led by Warsaw-based Counsel Adrian Horne.

Redcliffe Partners did not reply to our inquiry about counsel for MHP.

Baker & McKenzie has advised Walgreens Boots Alliance, which it identifies as “the first global pharmacy-led, health and well-being enterprise,” on the sale of its local pharmaceutical wholesale business, Alliance Healthcare Russia, to leading Russian health and beauty retailer 36.6. Herbert Smith Freehills advised 36.6 on the deal, which resulted in Walgreens Boots Alliance owning a 15% stake in the 36.6 group.

The multi-jurisdictional Baker & McKenzie team was led by Partners Helen Bradley, Sergei Voitishkin, Sergey Krokhalev, and Alexander Spoor, with input from Tharani Dharmaraj, Phelim O’Doherty, Kiki Tienstra, Igor Kungurov, Fedor Mukhodanov, Emile Doelwijt, Thomas Quincey and Andrew Forbes.

Herbert Smith Freehills did not reply to our inquiry about its work on the deal.

Three lawyers from CEE — Romanian tax specialist Tudor Nedelea, Ukrainian corporate lawyer Galyna Zagorodniuk, and Austrian corporate lawyer Elisabeth Stichmann — are among the 48 lawyers promoted to partner by DLA Piper as part of its 2016 global promotion round.

Tudor Nedelea has over 10 years’ experience in both Romanian and international taxation, and the firm describes him as “involved in complex assignments such as merger and acquisition processes, business restructuring schemes, various corporate tax consultancy projects and due diligence projects.” DLA Piper reports that he is “also involved in international tax structuring matters, advising several clients in setting up of their holding structures, working closely with advisors in The Netherlands, Cyprus and Luxembourg.” He began his career as a Tax Consultant at PriceWaterhouseCoopers in 2000 and moved up the ladder for 10 years before joining DLA Piper in August 2010 as a Tax Director and head of the firm’s Romanian Tax Practice. He graduated from the Bucharest Academy of Economic Studies in 2001.

Galyna Zagorodniuk, in Ukraine, specializes in corporate/M&A, competition law, and employment, and works in various sectors, including oil and gas, food manufacturing, hospitality, pharmaceuticals, retail, and IT.

In addition to her corporate practice, she Co-heads DLA’s Ukrainian Competition practice. She started her career as a lawyer with the Antimonopoly Committee of Ukraine in 1997, then went in-house with Ukrainian Securities JSC in September of that year. She became Head of Back Office and Deputy General Director of the Helvex Financial Agency, where she stayed for four and a half years before moving into private practice as a Senior Associate with Konnov & Sozanovsky in September, 2002. In January 2005 she moved over to Ernst & Young, and six months later joined DLA, where she remains today. She received her law degree from Kyiv’s National Taras Shevchenko University in 1997, an MA in Law from that same institution in 1998, and an LL.M. from the University of London in 2010. Among recent matters she’s worked on are a 2015 sale by Pharma Start’s shareholders of a 100% stake in the company to Acino Pharma (as reported by CEE Legal Matters on October 30, 2015), and the obtaining of merger clearance from the Antimonopoly Committee of Ukraine for Discovery Communicatons’ acquisition of ALL3Media Holding Limited, made together with Liberty Group (as reported by CEE Legal Matters on August 14, 2014).  

Elisabeth Stichmann, in Vienna, focusses on M&A, corporate commercial, strategic advice of shareholders in listed and private companies, global corporate restructuring of company groups including post-M&A integration, as well as on setting up, structuring, and operating private foundations. According to DLA Piper, she has “in-depth knowledge of the life sciences and retail sectors and regularly advises clients on industry-specific legal matters.” She began her career with three and a half years as an Associate with Dorda Bruegger Jordis in 2004, then joined DLA Piper Weiss-Tessbach in March of 2008, gradually transitioning through positions as Associate, Attorney-at-law, Senior Lead Lawyer, and finally Partner.  She obtained her law degree from the University of Virginia in 2003, and another degree from the University of Essex that same year. Among the matters she has worked on is TRINFICO’s 2014 purchase of two office towers in the Airport City of St. Petersburg, Russia, via its Russian Blagosostoyanie real estate fund (as reported by CEE Legal Matters on November 27, 2014), and Pfizer’s 2014 acquisition of Baxter’s USD commercial vaccine business (as reported by CEE Legal matters on August 11, 2014).

According to a DLA Piper announcement, “across the firm’s practice groups globally, Corporate saw the largest intake of new partners with 12 promotions, followed by Litigation & Regulatory with 10 and Real Estate with 7 promotions. The Tax group had five promotions and the Finance and IPT groups both had four, with a further three in Employment. There were 18 promotions in the United States, 14 in the United Kingdom, 9 across Continental Europe, 5 in Asia and a further 2 in Australia.”

Simon Levine, Global Co-CEO of DLA Piper, commented: “I would like to congratulate all of our lawyers promoted to the partnership globally this year. Developing the capability of our people and helping them to realise their potential is a key part of our global strategy and allows us to deliver the highest quality service to our clients.”

Jay Rains, Global Co-CEO, added: “These lawyers represent the future of DLA Piper and will play an integral role in growing our practice, making the partnership stronger and achieving our vision to be the world’s leading global business law firm. We congratulate each and every one of them on their dedication to the firm and look forward to their contributions in the years to come.”

ODI has advised Polish investor Aluform, a subsidiary of Grupa Kety S.A, in the Slovene privatization process of AHA EMMI Predelava Aluminija, d.o.o. based in Slovenska Bistrica, organized via a competitive international public tender. Aluform, as winning bidder, acquired 100% of the business and receivables of AHA EMMI from owner Bank Assets Management Company (BAMC) for a total price of EUR 2.5 million. KRB advised BAMC on the sale agreement, which was signed on March 26, 2016 with several conditions precedent, including notification of the Slovenian Competition Authority.

Aluform, which is seated in Tychy, Poland, is one of 22 subsidiaries of Grupa Kety located throughout Europe and operating in three main business areas: extrusion of aluminum and production of aluminum systems for construction and flexible packaging. Grupa Kety is a public limited company traded on the Warsaw Stock Exchange with the consolidated yearly turnover in 2015 of more than EUR 470 million, an EBITDA of EUR 79 million, and almost 21% return on equity.

The core business of AHA EMMI is the surface and CNC machining of aluminum profiles for customers producing household appliances, furniture, and interior furnishings. AHA EMMI in 2015 generated sales revenue of EUR 23.3 million and EBITDA of EUR 0.7 million and employed 343 employees. 

ODI Managing Partner Uros Ilic highlighted the extremely short timeline of the transaction, as only 15 days passed between the deadline for the binding offer and signing of the contract, which he said required two very intensive simultaneous work streams (DD investigation and transaction support). He also emphasized the growing interest of Polish companies for the Slovenian market: only in the last 6 months ODI was involved in three deals with Polish buyers of Slovenian companies being privatized. 

ODI, acting as an exclusive legal counsel on behalf of Grupa Kety, provided legal due diligence of the target, competition analysis and was involved in drafting and negotiating the agreement on the sale of business share, including the sale of receivables and other ancillary documents. The ODI team was led by Partner Uros Ilic and Senior Associate Suzana Boncina Jamsek, assisted by Senior Associate Lea Vatovec. 

The KRB team was led by Partner Simon Bracun, assisted by Senior Associate Jana Bozic.

Chajec, Don-Siemion & Zyto (CDZ) has advised Solser Management Limited on the sale of the Centrum Mobilnych Technologii Mobiltek S.A. Group (which includes, among others, Eurokoncept Sp. z o.o. and Dotpay S.A.) to the MCI Private Ventures FIZ closed investment fund. SKS Legal advised MCI Private Ventures on the deal, which closed on March 2016 following clearance from the Polish Antimonopoly Office.

The Centrum Mobilnych Technologii Mobiltek S.A. Group is active in the market of SMS Premium and Direct Carrier Billing services, IT solutions for mobile banking, online payments and platforms, and mobile payment and other online services.

As part of the transaction, CDZ represented Solser Management in negotiations with MCI Private Ventures and drafted the transaction documents, including a shareholders’ agreement on exit from the group of companies and a share sale agreement.

The CDZ team was headed by Partner Szymon Skiendzielewski, supported by Advocate Malgorzata Sas.

SKS Legal did not reply to our inquiry on the matter.

Eversheds Saladzius has advised US storage and information management company Iron Mountain on its acquisition of AB Archyvu Centras from its founders.

Archyvu Centras is a holding company providing business archiving and records management services through its subsidiaries in the Baltic countries: Lithuania’s Archyvu Sistemos and Confidento, Latvia’s Arhivu Serviss, and a branch of Archyvu Sistemos in Estonia. 

Eversheds Saladzius informed CEE Legal Matters that the identity of counsel for the sellers was confidential.

Modelled on Sec 93 para 1 of the German Stock Corporation Act, a 2015 reform of the Austrian Criminal Code introduced a “Business Judgement Rule” (BJR) into the Austrian Stock Corporation Act (AktG) and the Limited Liability Companies Act (GmbHG). The rule applies to management and supervisory board members and became effective at the beginning of 2016.

The BJR establishes a “safe harbor” for management and supervisory boards from liability for their actions when taking business decisions, provided that the following conditions are met:

• board members must act free from conflicts of interest;
• a decision must be based on all (material) information reasonably available; and
• board members must have (justifiably) believed that the decision was in the best interests of the company.

The limitation to business decisions means that the BJR will only protect board members and managing directors in areas where they legitimately have discretion and room for deciding between alternative options. This is not the case if the law or the articles of the company require specific conduct. For instance, whether to seek approval of the supervisory board or the shareholders for an important matter or whether to file for the opening of insolvency is not a question left to the discretion of management.

The new BJR will bring about changes in the decision making process of boards, in particular for complex, risky, far-reaching, resource-consuming, and strategically important matters.

What does it change in practice?

Experience and case law in Germany (where the BJR was introduced into the German Stock Corporation Act already in 2005) provide a number of practical implications for the way in which management and supervisory boards will need to approach key matters under the new rules:

• If anything is (or could be seen) to constitute a conflict of interest, be sensible, transparent and proactive: (i) disclose it (as early as possible); and (ii) at the very least, abstain from getting involved in the matter when decisions are taken;
• The more a matter requires deviation from “standard procedure”, the better documented and the more thorough arguments must be made as to why this particular approach is in the best interest of the company;
• Boards may need to retain their own external advisers in order to bring in independent expertise and know-how as a basis for their decisions, certainly on complex matters;
• Whatever you do and however you decide may be subject to scrutiny of shareholders at the next general meeting. The benefit of hindsight, whilst often unfairly applied, may in reality turn out to be very difficult to counteract unless a decision has been prepared and taken on a very solid basis.

Unsurprisingly, the requirements for the board will be higher the more strategically relevant, complex and/or risky a certain matter is.

Specific examples

Specific situations which may arise include:

• whether to proceed with an M&A transaction without conducting due diligence;
• whether to sell an asset at less than an appraised value;
• whether to grant a loan or provide security (at certain terms);
• whether to commence or continue litigation, enter into a settlement – or whether to appeal a court decision;
• whether to grant a bonus or raise to a (senior) employee;
• whether to file a leniency application in case of a violation of competition law;
• whether to act as sponsor or make a donation;
• whether to terminate a contract early or for cause; or
• whether to waive a debt or pursue a claim.

These examples show that not only “high exposure” or one-time decisions, but also matters arising on a day-to-day basis, may require a more nuanced and refined approach under the new rules.

When the BJR was introduced in Germany, the goal was to recognize that incurring risk is inherent in taking management responsibility and to protect managers and supervisory board members who were prepared to do just that – provided certain criteria were met. This is clearly the right goal. Hopefully, the BJR will be applied and interpreted this way in Austria. In their own interest, management and supervisory boards should adapt quickly to the new framework.

By Florian Kusznier, Partner, Schoenherr

Bondoc & Asociatii has advised Valad Europe on its acquisition, made alongside one of its global institutional investor partners, of all of the assets owned by the Central European Industrial Fund (CEIF) managed by Aviva Investors. As part of the transaction, pbb Deutsche Pfandbriefbank has refinanced a EUR 160 million loan against the portfolio.

CEIF owned 22 multi-let industrial and logistics properties in Poland, Hungary, Romania, and the Czech Republic, totalling 620,000 square meters. Following the acquisition, Valad Europe will continue as asset manager and take on the investment management of the portfolio from Aviva Investors.

Thierry Leleu, Head of Funds Management at Valad Europe, commented: “The acquisition and extension of CEIF is a great result and comes at a time when there is strong demand for industrial and logistics assets in Central and Eastern Europe. The portfolio comprises several good quality multi-let industrial and logistics properties, primarily located in Poland, the Czech Republic, Hungary and Romania.”

Charles Balch, Head of Real Estate Finance International at pbb Deutsche Pfandbriefbank, commented: “pbb Deutsche Pfandbriefbank is pleased to be able to maintain its support for the Central European Industrial Fund under this new ownership. Valad will provide an important level of continuity to the ongoing management and realisation of the fund’s business strategy.”

Valad Europe manages EUR 4.7 billion of real estate assets and investment capacity across its 24 funds and mandates in Europe. With a team of 28 in Central Europe, Valad manages approximately EUR 870 million of assets consisting of 730 tenants and covering 985,000 square meters of space across Poland, the Czech Republic, Hungary, and Romania.

The Bondoc & Asociatii team consisted of Partner Mihaela Bondoc (on Real Estate and M&A), Managing Partner Lucian Bondoc (on Competition), and Partner Simona Petrisor (on Financing).

Laszczuk & Partners has supported Velux Polska, a sales company belongs to the VKR Group, a worldwide window producer, in negotiating a lease of 1,500 square meters of office space in The Park Warsaw office complex in Warsaw’s Wlochy district from developer and property manager White Star Real Estate. Velux Polska will move into building B2 at the end of May, 2016.

Laszczuk & Partners Senior Associate Marta Bzowska-Warsza represented Velux during negotiations.

White Star was represented by in-house counsel.

Image Source: theparkwarsaw.pl

Eversheds Saladzius and Tark Grunte Sukiene have advised Fortum and Lietuvos Energija, respectively, on a substantial joint venture project between the two for co-generation power plant development.

Eversheds Saladzius reported that it advised Fortum “on the shareholders agreement, corporate structuring, [and] other significant corporate and commercial matters.” The firm described the deal as “the most important strategic project in the energy sector in Lithuania in 2015-2016, involving development of combustion (incineration plants) producing heating and electricity (investments over EUR 100 million).”

The Tark Grunte Sutkiene team consisted of Partner Vilius Bernatonis and Associate Partner Dalia Tamasauskaite-Ziliene.