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Unsurprising for regular CEELM readers, the winding down of HETA remains among the hot topics in Austria, according to David Christian Bauer, Country Managing Partner at DLA Piper in Vienna, who says: “it is still a huge case with many lawyers (as well as accountants, auditors, etc) being kept busy by it.

In terms of recent updates, the Austrian Republic has made an offer to investors to pay a specific percentage of the amount requested.” On the German front of the HETA/Hypo story, Bauer reports that not much has happened recently, with the recent court hearing in Frankfurt resulting in no decision just yet. There is one erroneous detail being floated around that the DLA Piper Partner would like to correct: “Unlike what many are saying, it is not the case that if the German claim is successful, insolvency will automatically follow with HETA still having a lot of defenses.” He argues that it is not possible to really enforce any claims on HETA since that enforcement would directly clash with the goal of the EU Directive on the resolution of banks, which is to avoid situations in which some investors getting back their full shares while others don’t — “they all need to be treated equally so I don’t see how that would be enforced.”

Concern about investor-state disputes are also in the spotlight in Austria, according to Bauer, both because of a current (and what he describes as a “huge”) ICSID arbitration going on in Washington resulting from a claim of the owners of Meinl Bank, and because there is a lot of “fear” over the proposed Transatlantic Trade and Investment Partnership. Bauer believes both issues are exaggerated: “First, if the new agreement with Canada is to come info force, US companies will simply be able to use their Canadian subsidiaries to sue European states, so really, the feared risks can happen anyway. Second, one needs to consider what the alternative is: to bring a claim in front of local courts … which is difficult for any investor, may it be a Romanian, French, or so on. I mean, if you invest in Saudi Arabia and then your investment goes bust due to unfair changes locally and you expect to be able to claim your money in Saudi courts, Good luck!” At the end of the day, he says, “what’s proposed is a well-established system that simply works, and, really, many times, if not in most cases, investors lose their case, so I find many of the concerns floated around as unfounded.”

Image Source: www.worldbank.org

Bucharest’s Stratulat Albulescu has announced the appointment of Otilia Petrescu to its partnership.

According to Stratulat Albulescu, Petrescu “is a highly skilled lawyer with over 13 years experience of business law practice including all aspects of structuring transactions, negotiations, group expansion and funding.” The firm describes her as “highly experienced in real estate and corporate/M&A, in particular in the retail sector, [where she has] conducted a large number of local and cross-border transactions,” and says that “prior to joining our team she was General Counsel and a Member of the Directors Committee of Louise Delhaize Group, a top French retailer, where she headed the legal department and was extensively involved in the development of their hypermarket chain on the Romanian market, gaining valuable business knowledge.” 

Before joining the Louise Delhaize Group in 2010, she worked for three years at Gide Loyrette Nouel and for two and a half years before that as an Associate at Musat & Asociatii. She received her law degree in 2002 from the Alexandru Ioan Cuza University in Iasi, Romania.

Stratulat Albulescu Managing Partner Silviu Stratulat commented: “We are working to expand our very successful team and Otilia brings a wealth of experience to our firm. Her appointment emphasizes our commitment to building upon our existing strong real estate sector expertise. She will play a key role in our firm’s offering by ensuring that we are best placed to meet all the needs of our clients from Romania and abroad.”

Allen & Overy and Gedik & Eraksoy, A&O’s Turkish arm, have advised the shareholders of the Solventas Teknik Depolama A.S. chemicals and petrochemicals storage company (“Solventas”) on the sale of their shares in the company to Turkish port operator Yilport Konteyner Terminali ve Liman Isletmeleri A.S., a subsidiary of Yilport Holding A.S., which is itself a wholly-owned subsidiary of Yildirim Group, one of the leading industrial groups of Turkey. Erdem & Erdem advised Yilport Holding on the deal. The share sale and purchase agreement was signed on June 14, 2016.

The transaction was signed after a competitive bidding process, according to Gedik & Eraksoy, which was “followed by intense negotiations between the sellers and a number of potential acquirers, all of which took over a year.” During the prolonged process, the Gedik & Eraksoy team simultaneously represented the shareholders vis-a-vis different interested bidders.

Solventas is a type A customs bonded warehouse for the storage of bulk liquid, drummed and packed chemicals, and petroleum products, established in 1967 in Kocaeli, Turkey. According to a Gedik & Eraksoy press release, “growing through constant innovation and upgrading, Solventas has combined its years of experience with a capacity for adaptation to new technologies, thus managing at once to remain young and ever more experienced. The company has maintained its unique leading position among other terminals, both in Turkey and the Mediterranean.”

Solventas will join Yilport’s global fleet as the 23rd terminal. The acquisition is expected to close following Turkish antitrust clearance and satisfaction of certain additional conditions precedent, and — according to Gedik & Erakoy, it “will contribute to the growth of the chemical industry, a vital segment in Turkey’s 2023 vision.” The terminal will be the first specialized port of Yilport Holding, dedicated exclusively to handling and storing chemicals and liquid cargo.

The Gedik & Eraksoy team was led by Partner Hakki Gedik, supported by Associates Naz Tamer and Cinar Sipahioglu.

The Erdem & Erdem team was led by Partners Ozgur Kocabasoglu and Tuna Solgar.

White & Case has advised Echo Investment S.A., the Poland-based real estate investment company, on two significant loan transactions, with Hogan Lovells advising the lenders on the one and Dentons the lender on the other.

In the first, White & Case advised Echo Investment on a financing of up to EUR 132 million it received from Berlin Hyp AG and ING Bank Slaski S.A. to refinance the current debt from Echo’s four office projects – Malta Office Park in Poznan, Park Rozwoju in Warsaw, West Gate in Wroclaw, and A4 Business Park in Katowice. Hogan Lovells advised Berlin Hyp and ING Bank Slaski on the deal.

White & Case also advised Echo Investment on a financing of up to EUR 185 million it received from Landesbank Hessen-Thuringen Girozentrale to refinance the current debt of seven shopping centers belonging to Echo – Galeria Sudecka in Jelenia Gora, Galeria Venada in Lomza, Galeria Amber in Kalisz, Galeria Olimpia in Belchatow, Outlet Park in Szczecin, Centrum Handlowe Echo in Przemysl, and Centrum Handlowe Echo in Belchatow. Dentons advised Landesbank Hessen-Thuringen Girozentrale.

White & Case describes Echo Investment as “one of the largest investment and development companies in Poland [which] has been listed on the Warsaw Stock Exchange since 1996. It invests in four main real estate sectors: housing construction, shopping centers, office construction, and hotel construction.”

The White & Case team in Warsaw advising on the transactions was led by Partner Tomasz Ostrowski, supported by Associates Sylwia Opiatowska, Michal Jadwisiak, Ilona Fedurek, and Mateusz Zawistowski.

The Hogan Lovells team advising Berlin Hyp AG and ING Bank Slaski S.A. was supervised by Counsel Mariusz Hyla, supported by Lawyers Jakub Zienkiewicz and Monika Obieglo. Associate Micha? Zajaczkowski was responsible for real estate law aspects of the project.

The Dentons team advising Landesbank Hessen-Thuringen Girozentrale was supervised by Partner Mateusz Toczyski and led by Senior Associate Anna Hergottova, supported by Senior Associate Mateusz Krajewski.

Esin Attorney Partnership, a member firm of Baker & McKenzie International, has advised Clear Channel Ireland Limited (“Clear Channel”) on the sale of its Turkish assets, Clear Channel Tanitim ve Iletisim A.S. and Mars Reklam Produksiyon A.S., to Turkish investor Umut Senol.

The Esin Attorney Partnership describes Clear Channel as having been “one of Turkey’s premiere outdoor advertising companies for more than a decade, prominently featured throughout Istanbul’s public transport system and largest retail centers.”

The deal was lead by Esin Partners Duygu Turgut and Senior Associate Ali Selim Demirel, supported by Gokce Serez and Pinar Erdem, as well as members of the firm’s corporate, IP, employment, competition, tax, and employment practice groups.

Vilgerts has advised BPM Capital, a mezzanine investment fund managed from Poland and Estonia, on a financing provided to Optometrijas Centrs SIA  for the management buy-out and further development of the company.

Vilgerts describes Optometrijas Centrs as “the leading Baltic optics chain operating stores with such brands as Vision Express, Pasaules Optika, and Optio.” The firm’s M&A and Corporate teams assisted BPM Capital with legal due diligence and preparation of financing documentation.

Vilgerts did not reply to inquiries about the make-up of its team or counsel for Optometrijas Centrs on the deal.

Bierc Siwik & Partners has successfully represented PW ETA – a Polish road building company based in Dabrowa Gornicza, a city in southern Poland — in public tender proceedings for maintenance services and construction projects on the roads in the areas of the city managed by the President of the City of Dabrowa Gornicza.

According to BS&P, the PW ETA offer of almost PLN 9 million was selected “as the most advantageous and led to signing the contract with the ordering party – the City Dabrowa Gornicza.”

Partner Robert Siwik led the BS&P team on the matter.

YukselKarkinKucuk — the largest firm in Turkey — has announced the departure of named Partner Muharrat Kucuk and the firm’s rebranding as the “YukselKarkin Attorney Partnership”.

In a statement on the firm’s website the firm announced that “our Attorney Partnership has gone through a restructuring process to adapt to ongoing market conditions and to provide effective solutions to our clients’ needs while maintaining our dynamic structure.”

The statement promises that “we continue to operate as a full service law firm due covering all legal practice areas,” and claims that “by virtue of the number of our lawyers, our wide industry experience, the quality of our services and the progressive steps we took, YukselKarkin Attorney Partnership will carry on as one of the top law firms in Turkey.”

An interview with Managing Partners Murat Karkin and Cuneyt Yuksel about this transformation can be found in the June 2016 issue of the CEE Legal Matters magazine, which will be sent out to subscribers at the end of the month.

On 13 June 2016, the Hungarian Parliament accepted a proposal to amend current transportation regulations (the “Proposal”) and resolved a dispute which arose as a result of Uber’s operations in Hungary.

Since the summer of 2014, when Uber started operating in Budapest, criticisms rained down on the transportation company. The problem with the current situation is twofold: most taxi companies are against this new form of transportation recognising that Uber drivers have an unfair competitive advantage, resulting from regulatory gaps, and a lack of supervision and control by the competent authorities thus reducing their operational costs. The other issue is push-back from Uber. After the Proposal was accepted, the Hungarian CEO of Uber argued that “the prohibition or banning of a new technology because it cannot be implemented into an obsolete regulatory framework cannot be a direction to follow”.

After multiple demonstrations, organised by taxi drivers, the Hungarian government bowed to the pressure and prepared the Proposal. According to the Proposal, the National Transport Authority (“NTA”) may order the temporary ban of public access to websites providing unlawful taxi services. Unlawfulness in this context means the providing or supporting of personal transport services on a commercial basis (taxi operator service). The government’s message can be read between the lines: facilitating personal transport is only allowed through the standard channels. The temporary ban may be imposed after the NTA levies a fine against a company which does not fulfil the legal criteria of personal transport organising. This means that if a transport organiser who does not own a license for such activity – one website and a mobile application not sufficing – could be banned for 365 days.

The timing of the Hungarian National Assembly’s decision on strengthening the rules of personal transport could be seen as a political message to Brussels. Only a few days passed from the announcement of the Proposal before an agenda on this topic was released by the European Commission. The executive body of the EU expressed the view that different regulations relating to these new business models could cause fragmentation across EU member states, resulting in uncertainty both for traditional service providers and also the new ones. This would hinder innovation, and in the long term would slow economic growth. Nevertheless, the Commission pointed out that sharing economy companies will also be paying taxes as they are part of the economy as are other companies, they cannot avoid such duty. One way to motivate tax paying is for member states to provide simple taxation rules. Hungary naturally argued in favour of banning Uber (together with inter alia: Belgium, France and the Netherlands).

To summarise, one thing seems to be clear: in the current regulatory system (regardless of whether we talk about a national or EU level) there is no effective solution right now. New business models will always evolve, and Member States will always try to protect their rightful interests (and their tax incomes).

By Matyas Zimmer, Associate, Schoenherr

Paksoy, working alongside Latham & Watkins, has advised lead arranger QInvest LLC and and financiers Qatar Islamic Bank Q.S.C., Barwa Bank Q.S.C., Al Khaliji, Fibabanka A.S., and Turkiye Finans Katilim Bankasi A.S. on a Murabaha Agreement and Term Facility Agreement for Boyner Perakende ve Tekstil Yatirimlari A.S. (“Boyner”) in the amount of USD 90 million. Yazici Legal advised Boyner on the deal.

Boyner is engaged in the weaving, spinning, dying, finishing, and marketing of woolen and cotton fabrics, and in the production of ready-made clothing. The company also operates its own chain stores under the names of NetWork and Fabrika Altinyildiz. 

The Paksoy team was led by Partner Sera Somay and Senior Associate Ozlem Barut, assisted by Associate Beril Paksoy.

Yazici Legal did not reply to our inquiries about the deal.