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Squire Patton Boggs advised the MCI.TechVentures Fund on the sale of 100% shares in Invia/Travelpanet to Rockaway, for EUR 56 million. The buyer was assisted by Wolf Theiss.

The MCI.TechVentures Fund is managed by Private Equity Managers and, according to Squire, this exit — which values Invia at EUR 76 million — will mark a record deal with the highest return on a single investment in the fund’s history. In selling its shares, the fund makes 11 times the capital it invested on its primary investment and 3.5 times on secondary investments. Other shareholders Michal Drozd and Mezzanine Management have also fully exited the business.

Invia claims to be the largest on-line travel agency in the Czech Republic and the largest online vacation packages provider in the Central Europe, offering travelpackages, air tickets, and hotels and cooperating with over 350 operators. It operaties through Invia.cz, its main entity in the Czech Republic, and through its multij-urisdictional subsidiaries, including Travelpanet.pl in Poland, Invia.hu in Hungary, and Invia.sk in Slovakia.  

Rockaway is an investment firm based in San Francisco, Prague, and Sao Paolo focused on building the Internet economy in emerging markets via venture capital, private equity, and its own incubation.

Commenting on the deal, Sylwester Janik, Partner at MCI and Fund manager of MCI.TechVentures, who has also served as the Chairman of the Board of Directors of Invia, commented: “During the period of our investment, Invia has established itself as a leader in the e-travel market in the CEE region through dynamic organic growth and acquisitions, while improving its operational efficiency. We are glad to have been involved in this effort. I would like to congratulate Michal Drozd, the founder and CEO of Invia Group, and other members of management team of Invia and Travelplanet on the transaction, as it is a significant achievement for the whole Group.  I also believe that this transaction will further strengthen Invia’s ability to develop in the CEE market and prove to be mutually beneficial for both Invia and Rockaway Group.”

The Squire Patton Boggs team advising the MCI.TechVentures Fund was led by Warsaw-based Partner Michal Karwacki, assisted by Prague-based Partner Radek Janecek, Manchester-based Partner Jane Haxby, Warsaw-based Partner Marcin Wnukowski, Bratislava-based Partner Tatiana Prokopova, and Budapest-based Partner Akos Eros, together with Warsaw-based Counsel Pawel Magierowski and Associates Ivan Chalupa and Nicole Jancova from Prague, Ewelina Witek from Warsaw, Agnes Budai from Budapest, Peter Devinsky from Bratislava, and Jonathan Ross from London. Squire, also with Karwacki in the lead, had previously advised MCI Management in Auctionata online auction house’s series C financing round (as reported by CEE Legal Matters on March 31, 2015).

Prague-based Wolf Theiss Partner Jan Myska led the team advising the buyer, assisted by Counsels Jan Kotous and Libor Prokes from Prague, Senior Associate Dariusz Harbaty from Warsaw, and Prague-based Associate Lenka Kucerova and Warsaw-based Associate Monika Gaczkowska.

This article explains novel structures that allow persons who are not members of a lending syndicate to hold security for the lenders who provide the financing.

The conundrum evolves

Pooling of security

Banks active in the CEE/SEE region often do not have the benefit of well-established security agent or security trust legislation. Accordingly, many syndicates and ad hoc lender groups in restructuring situations have found it difficult to devise structures that balance the requirement of each lender’s loan receivables benefitting from security, with the lenders’ desire to have freely tradable loan receivables that can be assigned or otherwise be transferred (without having to re-register or otherwise re-create numerous security interests on exiting a lending relation). For want of legal recognition of eg, Anglo-Saxon security trusts, structures commonly used nowadays evolve around contract law concepts and include “parallel debt” or, in case of finance documents governed by Austrian law, joint (and several) creditor structures (Gesamtgläubigerschaft). Those structures allow a single person, the security agent, to hold security (even if of accessory (akzessorisch) nature) for the aggregate amount of lenders’ receivables by establishing a claim of the security agent and/or by bundling lenders’ claims in the security agent.

But what if there is a problem with the security agent?

However, not long after bankers and their legal counsel had managed to address those legal and structural issues and became comfortable with one person holding the collateral for the entire syndicate, new questions arose – also in the wake of increased awareness of bank insolvency scenarios – against the background of lenders not wishing to incur credit risk on another bank acting as security agent.

Or what if no lender is willing to do the job?

Also, in certain (in particular restructuring) situations, lender groups have encountered that no single lending bank would be readily prepared to assume the role of security agent and related liabilities and obligations of holding and administering the transaction security for the syndicate.

Externalise secured creditor positions?

There is only so much a lawyer can do

For the first issue (security agent credit risk) lenders and their inventive legal teams and outside counsel are in many instances able to devise solutions. Structural features re-solving for this may include the creation of a trust (Treuhand) by the security agent over the collateral and/or the proceeds thereof for the benefit of the syndicate lenders. This would be the commonly used route in Austria. However, in case of uncertainty whether such trust (Treuhand) can be established under the laws applicable to the financing, a security agent could be asked to provide security over its rights to the collateral (eg, a pledge over pledge (Afterpfandrecht)), to the lenders in the syndicate as security for their claims against the security agent.

Somebody has to do it

On the other hand, the second issue of no lender being prepared to assume the security agency role cannot be addressed by legal means only. Accordingly, we have recently witnessed a demand for professional service providers that have the necessary skillset to hold and administer security for a wider group of lenders, be it a syndicate or an ad hoc group of creditors in a restructuring scenario. Ideally, such service providers would not engage in any other (banking) activity that could expose them, and thus the lenders they front, to operational/solvency risks.

Whereas some other jurisdictions (eg, England and Wales) appear to have a well-established (and partly supervised) services industry when it comes to security trustees or security agents, advisors acting in the CEE/SEE regions do not yet appear to offer that role as part of their services.

Being a joint (and several) creditor without being a lender

That aside, in jurisdictions (such as Austria) where the right to hold security cannot be separated from the secured claim, the “outsourcing” of security holding to a third party service provider also gives rise to a number of interesting legal questions, including whether one can be a joint (and several) creditor for purposes of the security structure without having a loan claim in its own right.

We think that the answer to this is yes: In many instances, the security agent will have a claim against the debtor for payment of a fee and there is no doubt that creditors of payment claims can “bundle” the same and agree with their debtor that one of those payment creditors is the joint (and several) creditor of all claims – even if those payment claims may have different causae (crediting, fee remuneration, etc). Moreover, compelling arguments can made that even in the absence of a fee claim, the creditors can agree with their debtor that one person (not having a payment claim in the first place) is joint (and several) creditor of all their claims. However, it remains to be seen if that latter structure will be accepted in practice and by the Austrian courts.

For various reasons, we encounter increasing demand by lenders to outsource security holding and administration. Austrian law provides for the contract law tools to satisfy this demand.

By Martin Ebner, Partner, Schoenherr

Sayenko Kharenko has acted as a Ukrainian legal advisor to PJSC Moscow Exchange in connection with the sale of controlling stakes in two leading Ukrainian stock exchanges: the PJSC Ukrainian Exchange and PJSC PFTS Stock Exchange. The shares were purchased by a group of investors with participation of two Ukrainian investment companies: Dragon Capital and UNIVER.

Created in 2011 through the merger of Moscow Interbank Currency Exchange and Russian Trading System, the Moscow Exchange is the largest stock exchange holding in Russia, and, concurrently, a multifunctional trading platform for shares, bonds, derivatives, currency, money market instruments and goods. This merger provided the Moscow Exchange with control over the PFTS Stock Exchange and the Ukrainian Exchange — which Sayenko Kharenko describes as “the most innovative centers for liquidity of the Ukrainian stock market.”

The Sayenko Kharenko team on the transaction was led by Partner Vladimir Sayenko, and included Senior Associate Oleksandr Nikolaichyk and Associate Mykhailo Grynyshyn.

Glimstedt has advised Unitcom, an Estonian IT and communication services company, on its acquisition of Uptime Systems, the IT infrastructure services provider of the Uptime Group. Estonia’s Primus law firm advised the sellers, Uptime OU, on the deal.

Unitcom offers ultra high speed Internet, television, telephone, IT infrastructure, and cloud services to household and corporate customers all over Estonia. Unitcom’s wireless broadband and fiber networks cover more than 65% of the Estonian population. Unitcom is the long-term certified partner of global technology companies Microsoft, Google, HP, Cisco, Dell, VMware, and F-Secure, among others. 

Toomas Peek, Chairman of the Management Board at Unitcom Estonia, said the acquisition will makes Unitcom the second biggest company on the market for ICT services for corporate customers in Estonia. 

Unitcom was advised by a Glimstedt team led by Partner Leho Pihkva, who described the transaction as “game-changing,” and said that it will have a significant impact on the development of the Estonian ICT services market. 

Primus did not respond to our inquiry about its work on the deal.

The Pepeliaev Group has announced that Elena Krestyantseva has been appointed Head of Land, Real Estate and Construction in the firm’s St. Petersburg office.

Krestyantseva specializes in land and environmental law, real estate and construction of industrial safety legislation, as well as in the field of dispute resolution. Her clients, according to the firm, “are mainly large enterprises for the production of industrial goods, automotive plants, large retailers, [and in] the oil and gas sector.” The firm reports that she also has “extensive experience representing clients in arbitration, courts of arbitration and international commercial arbitration to resolve disputes in real estate, including disputes builders and developers with the state authorities in the implementation of investment projects.”

Krestyantseva graduated from the law faculty of St. Petersburg State University, and joined the Pepeliaev Group in 2008, progressing from Junior Associate to her current role.

Hogan Lovells has assisted Polymetal International Plc, a major LSE-listed gold-mining group operating in Russia and Kazakhstan, on signing a binding agreement for acquisition of the Kapan mine in Armenia from TSX-listed Canadian international gold mining group Dundee Precious Metals Inc. (“DPM”). The Toronto office of Cassels Brock advised DPM on the transaction, which was structured through a sale of shares in the Armenian company Dundee Precious Metals Kapan CJSC (“DPMK”).

The consideration payable for the shares in DPMK will consist of: (i) USD 10 million in cash, (ii) USD 15 million in Polymetal shares, and (iii) a 2% net smelter royalty on future production from the Kapan mine capped at USD 25 million.

Hogan Lovells advised Polymetal on the entirety of the transaction documents including the share purchase agreement and net smelter return royalty agreement. The share purchase agreement is subject to various representations, warranties, covenants, and indemnities. The transaction is also subject to: (i) DPM obtaining its lenders’ consent, release, and discharge in respect of their security interest over the shares of DPMK; and (ii) the parties obtaining all regulatory approvals, including the approval of the State Commission for the Protection of Economic Competition of the Republic of Armenia to the transfer of DPMK shares. 

Closing of the Transaction is expected to take place in the second quarter of 2016. 

“Polymetal believes that the acquisition of the Kapan mine will result in the development of a profitable regional processing hub with sizable production which will provide a strong operating platform to pursue further opportunities in Armenia,” said Vitaly Nesis, Group CEO of Polymetal.

Hogan Lovells Managing Partner and Head of Corporate Practice of the Moscow office Oxana Balayan said of the deal that: “It is a fantastic piece of work for Polymetal which follows our recent work with Polymetal team on establishment of their production joint venture with Russian No 1 gold producer Polyus Gold in Yakutia, Russia in December 2015.  It is great to see such transaction happening now despite hard economic and political times for the Russian business. The Polymetal team in Russia and Armenia is a pleasure to work with.”  

Balayan led the firm’s team on the deal, with support from Counsel Maria Baeva, and the assistance of Associates Maria Kazakova and Denis Shakhov.

The Budapest office of Jeantet has advised Accor Pannonia Hotels Zrt. on its EUR 27.5 million acquisition of two hotels in Budapest: the 139-room Ibis Budapest Heroes Square and the 227-room Mercure Budapest City Center. Illes & Partners advised the seller on the transaction, which also included all furniture, fixtures, and equipment.

Accor Pannonia has already been operating the hotels under lease agreements. The majority shareholder of Accor Pannonia Hotels Zrt. is Orbis S.A, a Polish public limited company that is listed on the Warsaw Stock Exchange. According to the firm, the acquisition is aimed at optimizing the business, in part by eliminating the cost of leasing the hotels.

The Jeantet team was led by Partner Francois d’Ornano and included Local Partner Ioana Knoll-Tudor and Attorney at Law Anna-Maria Veres. All were a part of the Gide Loyrette Nouel team in Budapest that moved to Jeantet at the end of 2015 (reported on by CEE Legal Matters on October 21, 2015).

Partner Tibor Illes of Iles & Partners advised the seller. 

Our friends at UJBL have reported that on March 11, 2016, Juscutum Partner Dmytro Gadomsky left the firm.

Gadomsky joined Juscutum in February 2013, after working as a Senior Associate and then Counsel at Arzinger for the preceding two and a half years. Before that he had worked as a Senior Consultant at Deloitte for three years, and as the Head of IP at Salkom for two years before that. He received his Bachelor’s degree in Law from the Kyiv National Economics University in 2004.

He leaves to become the CEO at Axon Partners, which he describes as a “legal moonshot,” encouraging observers to “stay tuned.”

This article is powered by our friends at ujbl.info. You can find the original full article here.

 

The Yust law firm has succesfully defended the interests of NPP Respirator OJSC in a tender dispute brought by SITEK LLC.

According to Yust, SITEK, which had won a tender process organized by NPP Respirator for preparation of documentation necessary for NPP Respirator’s intended participation in a Russian Federal program titled “Development of the Defense Industry Complex of the Russian Federation for 2011 – 2020” (or the “Program”), sought a court order compelling NPP Respirator to enter into the agreement. However, after the results of the tender had been calculated, NPP Respirator was excluded from the Program, obviating the need for the documentation.

The court ruled in favor of Yust client NPP Respirator. Dmitry Seregin, Yust Advisor, explained that “when determining the procedure of execution of an agreement, one needs to follow, first and foremost, the Federal Law No. 223-FZ ‘On purchases of goods, works, services by certain types of legal entities,’ the Provision on purchases of NPP Respirator OJSC, and the tender documentation. Said documents establish the procedure and the time limit for entering into the agreement, and said time limit expired in January of 2015, before [SITEK] sent the duly made acceptance of the agreement.”

Kinstellar has announced that Counsel Jan Juroska has been promoted to Partner in the firm’s Prague office.

Juroska joined the office in 2006, before its 2007 split from Linklaters and reformation as Kinstellar. He specializes in all aspects of corporate work, including M&A, private equity, joint ventures, and corporate finance. According to Kinstellar, “he has advised many well-known international and domestic clients such as JP Morgan, Goldman Sachs, CPI, CEZ, Credit Agricole Consumer Finance, and Santander. While primarily focused on M&A for strategic and financial investors, Jan also has experience in capital market transactions (bond issues, IPOs) and in NPL and other distressed-asset transactions. On the M&A side, Jan has advised on some of the largest transactions in the Czech Republic in the recent years — a consortium of Allianz and Borealis on its acquisition of NET4GAS (including advice in connection with the refinancing of the acquisition debt by a mixture of debt instruments – loans and bonds), one of the largest energy company on the sale of Prazska plynarenska. In the Private Equity sector, Jan has advised Genesis Capital, Carlyle, TA Associates (on investment in W.A.G. payment solutions) and MEP (on the acquisitions of leading laboratory diagnostics providers in the Czech Republic and Slovakia).”

Juroska graduated from the Palecky University in Olomouc, in the Czech Republic, in 2005, and received an LL.M. from the Chicago-Kent University of Law, Illinois Institute of Technology in 2006.

He was made Counsel by Kinstellar in spring, 2015 (as reported by CEE Legal Matters on March 3, 2015). Last fall Juroska participated on the Kinstellar team advising NOVA Real Estate on its acquisition of three shopping centers in the Czech Republic from Bluehouse Capital (as reported by CEE Legal Matters on October 7, 2015).