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Category Archives: M&A and Corporate

LEXTAL advised Skandinaviska Enskilda Banken AB in EUR 500,000,000 syndicated finance transaction

LEXTAL advised Skandinaviska Enskilda Banken AB (publ), other banks and number of institutional investors in a EUR 500,000,000 financing to Adven (syndicated loan facility and notes’ issue).

Adven is the leading provider of energy and water services across the Nordic and Baltic countries. LEXTAL worked in cooperation with Allen & Overy (lead counsel) and Castren & Snellman (Finnish counsel).

LEXTAL team was led by partner Ants Karu.

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LEXTAL advised Santander Bank Polska in EUR 120,000,000 syndicated loan facility

LEXTAL advised Santander Bank Polska and other banks in connection with a EUR 120,000,000 syndicated loan facility to plywood manufacturing group Paged.

Advice was provided in cooperation with the lead counsel White & Case. LEXTAL team was led by partner Ants Karu.

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LEXTAL ranks high in Legal 500 EMEA

We are proud to announce that LEXTAL has been ranked by Legal 500 among other best Dispute Resolution, Tax, Commercial, Corporate, M&A and IP, IT and Telecoms teams in Estonia!

Legal 500 highlighted the following:

LEXTALs ‘efficient’ team is ‘proactive and takes the time to get to know its clients’. Ants Karu provides ‘very detailed advice tailored to each client’s individual circumstances’ and Margus Reiland ‘thinks outside the box’.

LEXTAL’s ‘fast and professional’ team is known for its experience in self-driving vehicles and cybercrime. Associate Rauno Kinkar is ‘very experienced and knowledgeable’.

The ‘diligent and responsive’ Ants Karu at LEXTAL ‘combines a good knowledge of tax and corporate law while keeping a clear focus on what is important and what is not’. Recent work highlights include advising Sevenoil and three other sellers on the sale of seven gas stations.

LEXTAL’s ‘excellent and quick team’ is experienced in both litigation and arbitration. The ‘thorough’ Olavi-Jüri Luik has ‘deep knowledge of contentious insurance contract matters’ and Urmas Ustav heads the team.

You can find further information on the Legal 500 website.

 

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New regulation on registration of true beneficial owners in Latvia

On 9 November 2017, amendments to the “Law on the Prevention of Money Laundering and Terrorism Financing” have entered into force. The main purpose of amendments is to prevent money laundering and terrorism financing and provide a free access to a correct, actual information on the true beneficial owners of legal entities. Consequently, the amendments provide an obligation for all legal entities, registered in the Register of Enterprises, to provide the information on their beneficial owners.

New regulation on registration of true beneficial owners

The amendments provide that the true beneficial owner of the legal entity is a natural person:

  • who owns, or who directly or indirectly controls at least 25 per cent of the legal entity capital shares or stocks with voting rights, or;
  • who directly or indirectly controls the legal entity in any other way.

We would like to draw your attention to the fact that each situation is individual and provided border of the 25 per cent is the minimal border, which requires the identification of the true beneficial owner. Whereas the total amount of participation is less than 25 per cent, it has to be evaluated whether there is another way to identify natural persons who actually control the legal entity according to the real situation (for example, concluded contracts, other mechanism of control).

New disclosure obligations

New disclosure obligations applies to legal entities, registered in the Register of Enterprises, including, but not limited to, general partnerships, foundations, co-operative societies, limited partnerships, trade unions, limited liability companies, association of trade unions, joint stock companies, permanent trade unions, associations of political parties, European companies.

Amendments provide only two exclusions from the obligation to provide information on the beneficial owner:

  • if information about the true beneficial owner has already been submitted to the Register of Enterprises according to other laws and the way how the control is performed rises from the status of the shareholder, owner, founder or member of the management board;
  • if the beneficial owner is a stockholder in a joint-stock company, stocks of which have been introduced to regulated market and the way how the control is performed rises from the status of stockholder.

We would like to note that there is an obligation to submit information on true beneficial owners to the Register of Enterprises before 1 March 2018. However, in any case, if legal entity submits an application to the Register of Enterprises before 01.03.2018, for registration (foundation) of a legal entity, or changes in composition of shareholders or management board, it shall be provided the information on the beneficial owners.

It is very important to remember that currently both administrative and criminal liability is applicable for such violations. In accordance with Section 1663 of the Latvian Administrative Violations Code, failure to submit the information or documents specified by regulatory enactments on time to the Register of Enterprises, will result in a warning or a fine for an amount from EUR 70 up to EUR 430. If the same violations occur within a year after the imposition of an administrative punishment a new fine shall be imposed for an amount from EUR 210 up to EUR 700.

According to Section 272 of the Criminal law, for failure to submit information stipulated by the law or for submission of knowingly false information, sanction goes from a fine to short-term detention, or community works.

Furthermore, regarding commercial legal entities, the management board may be held liable for failure to provide the information about the true beneficial owners, if the company will suffer damages as a result of the violation, and if the management board could not be able to prove that it acted as a good and proper owner

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New corporate regulation in Estonia: contact person

As from 15 January 2018 Estonian company must designate a “contact person” if its management board is located outside of Estonia. If the management board of is located in Estonia, appointment of a “contact person” is optional.

What does “contact person” mean?

Estonian company (EstCo), as well a foreign company that has a branch in Estonia (branch), may appoint a contact person to whom the procedural documents of EstCo and the declarations of intent addressed to EstCo may be delivered in Estonia. Upon delivery of a procedural document or declaration of intent to the contact person, the respective procedural document or declaration of intent is deemed to have been delivered also to EstCo.
Contact person will be registered in the commercial register.

What are “procedural documents and declarations of intent”?

The procedural documents may be court documents (for example lawsuit filed against EstCo), communication from tax office or other state institutions, etc. The declarations of intent may be letters from business partners (for example notification of renewal or termination of a contract) or any other similar business correspondence.

Do I need to have a contact person?

If the management board of EstCo is located in a foreign state, EstCo must designate a contact person. This obligation also applies to a branch, unless the residence of at least 50% of branch managers is in Estonia, in another EEA member state or in Switzerland.

If the management board of EstCo is located in Estonia, appointment of a contact person is optional.

The location of the management board is undefined vague term. It is generally understood as a place where the management board of EstCo carries out the everyday management of EstCo.

Who can act as a contact person?

If EstCo’s management board is located in a foreign state, then:

a) only a notary, notary’s office, attorney, law firm, sworn auditor, audit firm, tax representative of a non-resident for the purposes of the Taxation Act or a trust and company service provider specified in § 8 of the Money Laundering and Terrorist Financing Prevention Act. The address of such contact person shall be considered the address of EstCo; or
b) if management board member, shareholder or procurator of EstCo has a residence in Estonia, anyone of them.

If EstCo’s management board is located in Estonia, then contact person can be anyone having Estonian address.

How can I appoint a contact person?

First step is to agree the appointment with the contact person and then submit a notarised or digitally signed application to the commercial register, accompanied with the contact person’s consent.

Can I replace a contact person?

Yes, EstCo can replace contact person anytime. In addition, the contact person can resign – how and when shall depend on the agreement between EstCo and the contact person.

Can LEXTAL act as a contact person?

Yes.

If you have any questions about the topic at hand, please do not hesitate to contact partner Ants Karu.

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Seminar: Practical hints on how to start business and win public tenders in Estonia and Lithuania?

Agenda and speakers:

11:00 to 11:30 – Registration and Coffee

11:30 to 11:45 – Welcoming remarks – Armands Jaunzars, LEXTAL Riga

11:45 to 12:05 – Practical guidance on business start in Estonia – Marge Männiko, LEXTAL Tallinn

12:05 to 12:25 – Practical guidance on business start in Lithuania – Tadas Vilčinskas, LEXTAL Vilnius

12:25 to 12:45 – Advantages of Tax system in Estonia – Ants Karu, LEXTAL Tallinn

12:45 to 13:15 – Coffee break, networking

13:15 to 13:35 – Advantages of Tax system in Lithuania – Arūnas Šidlauskas, LEXTAL Vilnius

13:35 to 13:55 – New Public Procurement regulation in Estonia – Alar Urm, LEXTAL Tallinn

13:55 to 14:15 – New Public Procurement regulation in Lithuania – Lina Vaitiekūnienė, LEXTAL Vilnius

14:15 to 14:30 – Q&A session

14:30 to 14:45 – Closing remarks – Armands Jaunzars, LEXTAL Riga

14:45                – Coffee and networking

Attending the seminar is free of charge

When?  Thursday, September 21, 2017

Where? Conference center Citadele,

Republikas laukums 2A, Riga, LV-1010, Latvia

 

Please register by sending an e-mail to Guna Heidemane at guna.heidemane@lextal.lv no later than 18 September 2017.

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LEXTAL advised AS Puukeskus in connection with entry into distribution agreement with Cembrit OY

LEXTAL advised AS Puukeskus (www.puukeskus.ee) in connection with entry into distribution agreement with Cembrit OY (www.cembrit.fi) appointing AS Puukeskus as distributor of Cembrit’s fibre-cement products in Estonia.

The transaction involved also the purchase of certain assets from Cembrit’s previous distributor. LEXTAL team was led by partner Ants Karu.

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Estonia’s leading business daily, Äripäev, chose Kristi Sild as the new chief editor of the handbook on employment law to be published

Since June LEXTAL’s partner Kristi Sild has been performing the duties of the chief editor of Äripäev’s handbook on employment law.

LEXTAL’s goal in editing the handbook is to record all the material legal amendments and case law, and the practice of institutions implementing employment law in order for the handbook to be a useful tool both for everyday work as well as for solving more complex situations.

LEXTAL’s partner, Margus Reiland, and attorney-at-law Margus Poola will also contribute to the project as co-authors.

AS Äripäev is the market leader of Estonia’s business media, and Äripäeva Käsiraamat publishes Estonian and Russian handbooks on 26 subjects.

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LEXTAL advised on sale of CV Keskus OÜ shares

LEXTAL advised HeadHunter Group on the sale of 100% shares of CV Keskus OÜ, operator of leading job classifieds sites cvkeskus.ee in Estonia, cvmarket.lv in Latvia and cvmarket.lt in Lithuania, to Ringier Axel Springer Media AG.

HeadHunter Group is the leading online HR solutions company operating in Russia, Ukraine, Belarus, Kazakhstan, Azerbaijan, Georgia, Uzbekistan and Kyrgyzstan. The company’s largest asset is HeadHunter website owning the database that comprises 300 thousand open vacancies and 24 million resumes. The lead investor in HeadHunter Group is Elbrus Capital (http://elbcp.com/).

Ringier Axel Springer Media AG is the joint venture of Swiss Ringier AG and the German Axel Springer SE. The company operates in the growth markets of Poland, Hungary, Serbia and Slovakia with a broad range of media services, comprising more than 160 digital and print offerings.

LEXTAL provided to HeadHunter Group full legal support during the sale process, including management of the due diligence process and administration of virtual data room, drafting and negotiating of the share sale-purchase agreement and other transaction documents.

The project was led by LEXTAL partners Ants Karu and Kristi Sild.

Please see the press release from https://hh.ru/article/504204.

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LEXTAL advised the sellers in the sale of Premium 7 gas stations to Circle K (Statoil)

LEXTAL advised the sellers in the sale of Premium 7 gas stations to Circle K (Statoil). LEXTAL’s team was led by partner Ants Karu.

 

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