“There were no major changes in the structure of the Latvian legal services market in 2019,” says Lauris Liepa, the Managing Partner of Cobalt in Latvia. “As before, three firms – Cobalt, Sorainen, and Ellex – have dominated both the transactions and the corporate advisory market. While some lawyers have changed firms, there have been no major moves regarding teams or senior lawyers. One of the reasons might be a relatively good situation in the legal services market, with growth in all practice areas.”
Cobalt has advised BaltCap portfolio company Coffee Address Holding, a vending and coffee service company in the Baltics operating under the Coffee Address brand, on its acquisition of SIA Kafe Serviss – a vending operator in Latvia. Solo practitioner Lauris Leja represented Kafe Serviss on the transaction, which remains subject to the approval of the the Latvian Competition Council.
“The Estonian general election took place in March this year, and we are finally able to see the results,” says Martin Simovart, Partner at Cobalt in Estonia. “Politics in Estonia is now quite a mess. The new government is a populist coalition – this means that the situation is unstable and a polarized sentiment has been created.”
Sorainen Latvia and Herbert Smith Freehills have advised MM Capital Infrastructure Fund I, a Marubeni-backed fund, on the acquisition of a 29.06% interest in JSC Conexus Baltic Grid, a unified natural gas transmission and storage operator in Latvia, from Marguerite Gas I. Marguerite was advised by CMS London and Cobalt on the transaction, which remains subject to regulatory approval.
Earlier this year the Estonian parliament enacted long-awaited dedicated covered bond legislation, finally allowing local banks to enter both regional and European-wide covered bond markets and to gain access to a reasonably priced and stable source of long-term funding for their key banking businesses (most importantly for funding the issuance of mortgage loans). Additionally, under the new legislation, local covered bond issuers able to meet prudential requirements under the Capital Requirements Regulation (CRR) will be able to benefit from certain forms of preferential treatment afforded to covered bonds. For the local banking sector that, at the moment, remains dominated by Scandinavian banking groups, the new legislation also creates a viable alternative to the parent funding.
Amazingly, the Lithuanian FinTech ecosystem report of 2018 revealed that there were 170 FinTech companies based in Lithuania – reflecting 45 percent growth over the previous year – with some 2,600 employees working in FinTech companies, more than 700 of which were newly-employed in 2018. The numbers are still growing this year.