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CHSH has advised the Metrans Group on the acquisition of three significant industrial properties as well as a small Hungarian railway company in Csepel, in Hungary. Metrans, a long-term client of CHSH, is a subsidiary of Hamburger Hafen und Logistik AG (HHLA) and one of the leading providers of inter-modal logistics services in Central and Eastern Europe.

The recent transaction concerned three industrial properties with a total area of approximately 23 hectares and the small railway company which, as the owner of the railway network on the properties, is responsible for all on-site railway operations. The transaction was completed in October 2015 with the conclusion of an agreement for the construction of a 165,000 square meters logistics hub for the transit and handling of goods with total annual capacity of 250,000 standard containers (TEU). 

The terminal constructed in Csepel/Budapest will operate as a central hub for the transit and handling of goods, in much the same way as the other sites operated by the Metrans Group in Prague and Ceska Trebova (Czech Republic) and Dunajska Streda (Slovakia). It is expected to become operational in 2017 and will initially create approximately 200 new jobs. 

The team at CHSH responsible for overseeing the transaction consisted of Partners Heinrich Foglar-Deinhardstein and Mark Krenn in Vienna and Tamas Polauf in Budapest, Attorneys Laszlo Krupl and Peter Szajlai, and Associate Zoltan Kolodzey.

“We’re pleased we were able to assist the Metrans Group in connection with this transaction and thus contribute to strengthening the position of our client in Hungary”, said CHSH Dezso & Partner Rechtsanwalte Partner Tamas Polauf.

Faegre Baker Daniels has bolstered its corporate practice and Central and Eastern European offering with the hire of Chicago-based Partner Ted Cominos and London-based Counsel Cristina Audran-Proca. Both come from Locke Lord LLP, which they joined upon its January 2015 merger with Edwards Wildman.

Cominos has a wealth of experience in private equity-backed and cross-border M&A transactions, particularly in Europe’s emerging markets and neighboring countries such as Russia, Turkey, and North Africa. He previously served as chair of Locke Lord’s cross-border practice group and led Linklater’s Central and Eastern European private equity group. In addition, he has advised on a range of matters from private equity fund formation to corporate commercial transactions and acquisitions.

Cristina Audran-Proca joins from Locke Lord as Counsel in the London office. She has significant expertise advising on corporate mergers and acquisitions, with a particular focus on private equity and venture capital transactions in Central and Southeastern Europe and neighboring markets. Audran-Proca also has substantial expertise coordinating transactions in France, holding her bachelor’s degree and an M.A. in business and economics law from the University of Paris I Pantheon Sorbonne.   

Audran-Proca commented on her feelings about joining the London office: “I am thrilled to be joining a firm with such international reach. I look forward to further strengthening our capabilities in the CEE region and I am hopeful that my significant experience in this area will be an asset to both domestic and global clients examining the exciting opportunities in the CEE.”

Paul Finlan, Head of the Faegre Baker Daniels London office, said of the appointments that: “Both Ted and Cristina are welcome additions, bolstering our CEE capabilities, as we look to further cement our reach in this region. With the recent re-launch of our International Practice Group we have an abundance of expertise to meet our clients ever-growing global demands.”

Cominos and Audran-Proca’s appointments follow the arrivals of CEE specialists and Partners Petar Orlic and Costanza Russo in Faegre Baker Daniels’ London office last year.

CMS has advised Erste Group on a 5 year EUR 91 million facility to acquire 12 logistics assets in CEE (RO, HU, SK and PL) for Blackstone — which was represented by Simpson Thatcher and DLA Piper.

According to CMS, “the 265,000 square meter portfolio covers 12 standing logistics investments, which are located in Hungary (5), Romania (4), Poland (2), and Slovakia (1), as well as land reserves. Out of this portfolio are currently two under construction – Bucharest and Ploesti (RO), which will be completed by Immofinanz. Blackstone will integrate the assets into Logicor, its European logistics platform.”

Richard Wilkinson, Head of Commercial Real Estate at Erste Group Bank AG said: “The real estate investment market in CEE shows an overall growth of 19% in 2015, especially our core markets Hungary, Romania and Slovakia, has been showing growth in transaction volumes and we expect this trend to continue throughout the year. As one of the leading real estate financial providers in Central and Eastern Europe we are pleased to support Blackstone in this significant transaction.”

Mo Barzegar, CEO & President at Logicor said: “Our latest logistics acquisition takes our CEE real estate portfolio to over 1 million sqm. This helps us provide a broader real estate offering for our customers and positions us to benefit from continued economic growth across the region.”

The CMS team advising Erste was led by Partner Simona Marin, with support of partners and lawyers: Catalina Gildau, Lawrence Florescu, Rowena Williams, Petru Seicaru, and Simon Dayes (Bucharest) Malgorzata Chrusciak, Ewelina Wagiel, and Joanna Nycz (Warsaw), Peter Simo and Dominika Bajzathova (Slovakia), Thomas de la Motte and Andreas Keller (Germany), Eduard Scheenstra, Charlotte van Heijst, and Jenny Noordermeer (Netherlands), Vivian Walry, Nicolas Jerique, and Julien Jerique (Luxembourg), Erika Papp, Szabina Soptei, Arpad Lantos, and Krisztina Nascso (Hungary), and Gunther Hanslik and Anna Konopka (Austria) on the banking and finance side, as well as Roxana Fratila, Alexandru Dumitrescu, and Stefan Virban (Bucharest), Gabor Czike and Andras Klupacs (Hungary), and Wojciech Koczara and Marcin Pasik (Warsaw) on the real estate side.

DLA Piper did not comment or offer more details.

Biris Goran has announced “the successful closure of a new stage” in the lawsuit between Farmec SA and Romania’s National Agency for Fiscal Administration (ANAF), obtaining an annulment of the ANAF’s “taxation decision,” which amounted to approximately EUR 13 million. In a previous settlement phase of Farmec’s tax appeal, Biris Goran had managed to partially annul the tax in the amount of approximately EUR 2 million.

According to Biris Goran, in December 2014, ANAF ordered Farmec to pay approximately EUR 15 million, an amount which “represented the recalculation of the payment of excise duties related to the alcohol used in product networks included in the company’s portfolio.” 

The team representing Farmec SA in court was headed by Biris Goran Partner Mihai Nusca, and the firm’s tax team, which offered assistance in the case, was headed by Ruxandra Jianu.

Nusca explained that: “We took over this case in December 2014 and then we successfully completed several important litigious phases. Of course, this stage won at the Cluj Court of Appeal represents a notable success of our litigation team. The decision rendered by the magistrates of the Cluj Court of Appeal has many favorable legal consequences, including that it safeguards more than 600 jobs, as well as that it helps Farmec to continue its activity and growth on the Romanian and international market.”

Jianu stated: “It was a complex case, in which we assisted Farmec as early as the tax inspection phase, we built defenses both in the inspection period and in the subsequent phases of the administrative appeal and court action. We are glad that the court ascertained what was obvious: the company complied with the legal provisions in force and the taxation of approximately EUR 15 million was performed with no legal ground. We thank Farmec for the confidence granted to Biris Goran and we are glad that starting now the company will focus its efforts on the business and brand expansion plans, being in top 3 major Romanian brands.”

The court’s decision can be appealed. 

Alexandrov & Partners is advising on the ICC Ukraine Reliable Partner Project, which is aimed at protecting “national producers during foreign economic operations.”

According to Alexandrov & Partners, the Reliable Partner Project will “create a data base of reliable partners to facilitate the elimination of information vacuum during cooperation in foreign markets. The data base will be publicly accessible on the Internet.” The firm declares itself “confident that the creation of an information portal for business entities with a ‘Reliable Partner’ status will make it possible to effectively look for partners for economic cooperation in Ukraine and abroad, increase the reputation of Ukrainian commodity producers, promote transparency of trade operations, reduce risks in business, and enhance their efficiency.”

The firm reports that it has “started to work on the creation of a separate information portal ‘Reliable Partner’ and drafting the regulations on how to obtain the status of a reliable partner.”

The project is led by Alexandrov & Partners Dmytro Alexandrov, the Vice President of ICC Ukraine, assisted by Senior Counsel Oleksandr Sydorenko.

Aleinikov & Partners reported that the Chamber for Commercial Disputes of the Supreme Court of the Republic of Belarus has upheld decisions of first and appeals instances dismissing the claim of unjust gains to the operator of firm client DEAL.BY.

According to Aleinikov & Partners, “DEAL.BY is an Internet shopping center, combining more than 100 thousand Belarusian companies with a range of goods and services. Similar trading platforms were created in Ukraine (prom.ua), Russia (tiu.ru), Kazakhstan (satu.kz), Moldova (prom.md), Brasil (negociol.com), and Turkey (ticiz.com) by the owner of the DEAL.BY portal.” All in all, according to Aleinikov & Partners, the number of companies registered in those trading platforms exceeds 2 million.

The firm’s team was led by Senior Partner Denis Aleinikov.

Russia’s YUST law firm has successfully persuaded the Court of Arbitration of the Moscow District uphold previous judgments of the courts of first and second instance, which had dismissed the claim brought by JSC “GUOV” against YUST client KapInstroy, in which GUOV alleged that KapInstroy’s lease to a land plot from the local administration was null and void.

According to YUST, GUOV was claiming that it had obtained ownership to the land plot in the course of a 2003-2004 privatization of assets of a “federal unitary venture.” Simulaneously, GUOV was claiming that the land plot was federal property, and thus that it was not the local administration’s to lease out in the first place.

YUST reported that, “it took the courts several years to consider the case, and they finally upheld the position of [KapInstroy’s] attorneys. However, the cassation instance returned the case for reconsideration twice. This time, the district court ruled the principal’s position well-founded.”

The YUST team consisted of Partner Anna Kotova-Smolenskaya and Senior Associate Ekaterina Motyvan  

On 16 February 2016 the European Commission (‘EC’) officially presented the new Energy Security Package.

The set promotes the EC’s increased role in the energy sector and aims at preventing and mitigating natural gas supply interruptions and increasing the liquidity and interconnection of the European internal energy market. In its current version the package has as a main focus the European natural gas market as it consists of (i) Security of Gas Supply Regulation; (ii) a new and revised Inter Governmental Agreements Decision and (iii) Liquefied natural gas (‘LNG’) and gas storage strategy.

The secure natural gas supply guarantee and climate change mitigation are the main challenges and the new Package envisages measures to increase energy production within the European Union, (including from renewables), the diversification of the energy sources, the routes and suppliers and completing the integration of the European internal energy market.

The Security of Gas Supply Regulation – by this regulation the EC’s introduces a new approach determining the manner of the measures implemented. For the first time, a solidarity principle would be applicable in severe crisis cases in a member state, where the neighboring countries will ensure natural gas supplies to households and essential social services entities until the member state in question overcome the crisis. In addition, the Regulation requires a better coordination between member states and cooperation with Energy Community countries, not party of the European Union. Last, but not least – the natural gas companies will have to notify member states and the EC about some security of supply relevant contracts upon their conclusion or modification.

The Revised IGA Decision – One of the main proposals, set out in the new and revised IGA Decision empowers the Commission to review ex-ante intergovernmental agreements to be signed with non-EU countries. The main role of EC is to ensure the future IGAs’ compliance with EU law, with member states’ governments required to take into account the EC’s opinion. In addition, the IGA Decision extends its scope to non-legally binding instruments for assessment. In case a member state decides to go ahead with such agreement after the EC has identified noncompliance with EU legislation, the respective member state might become subject to infringement proceedings.

The existing IGAs signed already by a number of European member states (e.g. Bulgaria along with Italy, Austria signed in 2006 bilateral intergovernmental agreements for the construction of the South Stream natural gas pipeline) are not addressed by the new rules put forth by the EC.

The LNG and natural gas storage strategy – the Strategy focuses on setting clear rules for developing the LNG infrastructure as an alternative to the pipeline supplies, which are the traditional paths for natural gas deliveries in Europe. EC considers that LNG production is expected to grow for the coming years (notably in the USA), thus economic incentives and cooperation with international partners for construction of new liquefaction facilities would be the vehicle to counteract the recent regional disparities in access to LNG alternative sources. In this respect, LNG infrastructure and so called regional gas hubs development could play a significant role in the future of the European internal energy market and especially to many countries from south-east of Europe, including Bulgaria which are still heavily dependent on a single gas source and/or supply route).

In this strategy, the Commission is setting new operational rules for improving and optimization of cross-border use of natural gas storage facilities. These measures also could play a crucial role for member states like Bulgaria which have currently only small storage capacities insufficient to support its market demands in crisis situations. The securitization of member states sufficient natural gas pipeline interconnection and the development of further interconnection infrastructure are also set as priority in that respect. The Package also proposes a new, more credible assessment process related to the EU progress of interconnector projects, after it was established that the implementation of a project of such a kind continues for approximately 11 years on average.

Next Steps – The Energy Security Package will now be forwarded to the European Parliament and European Council for consideration. New rules are expected to come into force after the package is approved by all concerned EU institutions. When will this happen is not yet defined – the Package sets no strict timetable for its implementation.

By Radoslav Mikov, Partner, and Katerina Novakova, Senior Associate, Wolf Theiss

Miro Senica and Attorneys has acted as legal advisor to ACH, d.d., in its successful overall debt refinancing. Davis Polk & Wardwell LLP from London advised ACH in regard to English law issues. The leading advisor to VTB bank on the deal was reportedly Baker & McKenzie Moscow, with a team cooperating with Karanovic & Nikolic in Ljubljana acting as local counsel to VTB bank.

ACH is a holding company from Slovenia, which, among others, is a majority shareholder in motorhome and caravan manufacturer Adria Mobil, Ljubljana based Union Hotels, and multi-brand car distribution and dealership businesses. 

According to a summary provided by Miro Senica and Attorneys, in November 2014 ACH entered into a master restructuring agreement with their then bank creditors, and then subsequently decided to refinance and consolidate its debt portfolio. The firm reports that “ACH consequently reached an agreement with VTB Bank (Austria) that VTB would provide a facility for repayment of all ACH financial debt in the value of EUR 73.5 million.”  

The new long term loan was extended to ACH in January 2016. According to Miro Senica and Attorneys, “several security and pledge agreements were negotiated and drafted alongside the main facility agreement to provide the new financier with sufficient comfort while leaving ACH enough room to further develop its business.”

The Miro Senica team was led by Founding Partner Miro Senica, Partner Mojca Muha, and Attorney at Law Nejc Novak. In a joint statement released by the firm, all three are quoted as saying, “The transaction has been complex and very challenging due to a tight timeframe at a turn of a year. The fact that the former financiers have been numerous required additional logistic efforts in order to close the transaction in time. Previously established pledges presented a complex legal situation, which made refinancing more difficult. Creative solutions were required in order to close the transaction and provide previous and new financiers with sufficient safety at all times during the refinancing.” 

Partner Marko Ketler and Attorney Ermina Kamencic, both working in cooperation with Karanovic & Nikolic, provided local counsel to VTB.

Baker & McKenzie Moscow did not reply to inquiries about the matter.

Editor’s Note: After this article was published, Baker & McKenzie announced that its Moscow-based team advising VTB Bank was led by Partner Simon Morgan, supported by Senior Associate Andrey Lebedev and Junior Associate Arsen Safaryan.

Sorainen has advised Delta Property, a Linstow group company, on extension of the Alfa shopping center in Riga with a total project value of approximately EUR 40 million.

Sorainen reports having reviewed and elaborated on the construction tender documentation and having “drafted special conditions under the FIDIC Red Book that were tailored for development of several stages and parallel operation and construction.”

Delta Property was advised by Specialist Legal Counsel Lelde Lavina and Associate Linda Reneslace.

The firm’s Riga office also recently advised Delta Property on a similar extension of Linstow group’s ORIGO shopping center (as reported by CEE Legal Matters on February 18, 2016).

Editor’s note: After this article was published, CEE Legal Matters learned that Sorainen’s work for Delta Property in this matter and in the extension of the ORIGO shopping center was provided in the first half of 2015. Klavins Ellex has informed us that Delta Property was acquired by its client, Blackstone, in December 2015.

Image Source: linstow.no