IFLR 1000
The Guide to the World's Leading Financial Law Firms

"My impression divides the last year into two parts. The first part on refinancing, restructuring, there is a clear trend to prolong terms of loans. Those who didn't restructure were in trouble," says one partner. "Good business managed to live through the hard times, working for new projects, new investments. Banks are more capable, they are willing to lend but not in huge amounts," one partner says.

"Quiet optimism" is an accurate description of the state of banking and finance in Lithuania. "The private lending situation is such that they've cleared up portfolios. The economic recovery trend is positive. There is confidence in the market. The trend is positive," one commentator says. Besides expected work on the restructuring of loans and credits, which has invariably decreased with banks having cleared up their portfolios, the market was buoyed by the return of new financing last year. "They're [financial institutions] not as scared to lend as a year ago. Renewed lending is more in retail. Retail lending is lively but not a workload to law firms," one partner says.

Corporate financing is starting to exhibit an upturn. While there have been no huge syndicated financings, commentators have observed a pickup in acquisition finance and aircraft finance areas. Furthermore, real estate finance is still in the restructuring phase, nevertheless, there are some newly formed real estate funds which are starting to raise cash and seeking assets on the market. "A lot of real estate was taken by the banks. These assets will be on the market quite soon as there are rumours of an exit from investors. The situation is kind of becoming ready to jump," one partner says.

Infrastructure becomes more and more of a sensitive issue as the government promised to pay much attention to this sector. There have been some possibilities with a restrained spate of PPP (public-private partnership) pilot projects in prisons, roads and hospitals. Nevertheless, much of the legal work remains on the government side with reduced scope on the private side; as one partner observes: "The reality is that the likelihood of such PPP projects is quite small. It's too big for local investors and too small for the London guys".

By far, the hottest topic on the project finance front is the planned construction of a new nuclear power plant on the site of the closed Ignalina plant. The financing of the Visaginas Nuclear Power Plant is set to extend beyond €10 billion and is one of the largest ever financings in the Baltics and CEE (Central & Eastern Europe). "It is of national importance to Lithuania and neighbours Poland, Latvia and Estonia. The government makes sure the project is bankable. It is a single project; it is too large to be a benchmark," one partner said. In renewable energy, there has been some activity in the last year. To this end, law firms have been primarily engaged with the financing of wind farms. There has been some activity with regard to internal combustion in waste management and hydropower but Lithuania does "not have large rivers" and most projects can be financed by single bank loans.

Lithuania's capital markets are seen as "quite shallow" and "any capital markets deal is a real event" according to one partner. Within the capital markets, sovereign issues are still a major talking point. "I'm very glad, as a private practitioner, that Lithuania continues borrowing in the international capital markets...as a citizen, I'm not so glad to see how borrowings are increasing. We are far from Greece and Italy... the budget deficit is decreasing. Borrowing will continue but it is reducing. These are good trends," one partner says. Another practitioner notes that: "What we understand from the ministry of finance is that this sovereign issue will be the last one. The government is borrowing a lot but there's cash flow and so no need to borrow more. It's likely the deal for September will be the last one. There will be no sovereign issues for the next few years." Additionally, it is not only the state that thinks of foreign capital markets; corporations too, are looking to finance abroad and consistent with the regional trend, they are looking to the Warsaw Stock Exchange.

Lawin is the gold standard when it comes to banking and finance in Lithuania. "Lawin is number one," says one partner, adding: "When you take into account that they have a large headcount". There is no doubt that the firm's capacity enables it to preserve its dominant share of the market and it is routinely involved in the major transactions. Nevertheless, there has been dissent as to the firm's sole proprietorship of the first tier. "Their structure operates as an industry based practice. They will list anything if it comes from a bank. There are other market players [with a market share in] pure banking finance," one rival says.

The firm is a market leader and has been a source of satisfaction for clients. "For hardcore cases, I choose Lawin. They are more aggressive and clearer in advice," says one client.

In the last twelve months, the firm has been involved in some of the market's big ticket mandates. With regard to scope and value, the firm is currently advising the Government of Lithuania in one of the largest ever financings in the Baltics and CEE (Central & Eastern Europe). Such advice pertains to the construction of a new nuclear power plant including over €10 billion for the construction of the plant, over €500 million for the construction of electricity seabed transmission from Sweden to Lithuania and over €200 million for the construction of an overhead power bridge between Poland and Lithuania. Additionally, the firm advised Nordea Bank Polska and Nordea Bank Finland Lithuania branch in financing the acquisition of Geonafta group companies by UAB Lotos Baltija and Lotos Petrobaltic. This has been hailed as one of the largest acquisition finance deals in Lithuania in 2011. Uniquely, the firm advised DnB Nord and SEB banks, as lead managers, in the first ever placement of Lithuania's sovereign bond issue at €75 million designed for the Baltic markets, offered at the same time in Lithuania, Latvia and Estonia.

Bernotas & Dominas Glimstedt has bolstered its team this year with the recruitment of partner, Linas Sesickas, and a number of associates. Assessments of the firm's performance have been a mixed bag from peers and clients alike. "Bernotas is strong despite some key people having left. Bright lawyers that started as associates are becoming visible. They grow from the inside and not from the outside," one partner says. However, another partner states: "They used to be top tier but their workflow is reducing. I've not come across them in banking & finance... the competence they accumulated with experience is still there but they're not so active".

There is a similar story on the client side. "We've been working with several firms, they're the best. It was a good experience," says one client, adding: "We trust them unconditionally; they've earned our trust over the years". However, another client states: "They are diligent, hardworking, but I think they can be a bit passive advising us, technical ability is sound but it could be more inventive."

Gediminas Dominas and Kestutis Jaskutelis are individuals who have been subject to praise from clients and peers. "Gediminas is a leading banking and finance partner. He's a really competent banking and finance lawyer," says one peer. "Kestutis is very business oriented and a very good negotiator. He understood the key elements of what we needed and had the time," one client said.

Despite uncertainty that pervades the appraisal of the firm, its deal list shows that it has received some notable instructions in the last year. As a result, it secures its place in the second tier. Interestingly, the firm is involved in a number of international finance institutions projects in Belarus. The firm is currently advising Norwegian fund Baltic Sea Properties and its manager First Newsec Asset Management Baltic on its €59 million restructuring of its financial obligations. Additionally, the firm is advising VMG Industry (BY) and its stakeholders from the VMG group on a €26.5 million European Bank of Reconstruction and Development (EBRD) loan and a €13.8 million shareholder's loan as part of a €77 million investment project in Belarus for the construction of a wood processing complex. The firm also advised OMA, a Belarusian DIY retail chain, on a €5 million loan supplied by the International Finance Corporation (IFC).

Raidla Lejins & Norcous is one of the stronger firms in tier two. In banking and finance the firm is starting to make some real inroads in its effort to break into the top tier. This owes much to an increased focus in banking and finance with the establishment of a finance and capital markets subgroup. "Raidla are quite active. They're a relatively strong firm in banking and finance," says one partner, adding: "The previous year, they had a large practice on commercial transactions with no banking and finance. Now, they have a specific sub team with more emphasis on banking and finance".

Clients have been very pleased with the quality received from the firm. "I must say that the firm is very professional. They're proactive, give good advice and overall they gave more than what was included in the mandate," says one client, "They were very responsive. As a local firm, their English communication, written and on the phone, was very good." Senior associate Akvile Bosaite has been the subject of praise among clients and peers. "She's the lady that's head of the sub-commission of banking and finance," says one partner.

The firm has had a busy year and supported the European Bank of Reconstruction and Development (EBRD) and Landesbank Baden-Württemberg, as senior lenders, in the provision of €47 million in loans to VMG Industry, a Belarus foreign limited liability company. This was in order to provide working capital and finance the construction, equipment and placing into operation of a €76 million greenfield wood processing complex in Mogilev, Belarus. The firm is advising EuroChem, a large Russian chemicals groups, in the €15 million squeeze-out of minority shareholders of AB Lifosa, a large Lithuanian fertilise manufacturer. Furthermore, Akvile Bosaite acted as advisor to UAB Pajurio investiciju grupe, an entity belonging to EReit (employees real estate investment trust) fund, managed by GILD Real Estate, in the renegotiation and restructure of a multimillion loan facility for the development of real estate provided for by Swedbank.

Sorainen has a solid banking and finance practice that is growing in stature with each passing edition. The firm's banking and finance practice is the second fastest growing practice in Sorainen's Lithuanian office. "Sorainen are active and have strength in their team. They are very good in capital markets and financing," says one partner. "We've seen them on a couple of deals, we saw their senior associate working in banking and finance," says another partner.

Clients have expressed their satisfaction with the services supplied by the firm. "They are very professional, keeping deadlines okay as well," says one partner, adding: "It's always what you could expect from partners, consultants [communication] was a real advantage. They communicate and are responsive. It's very professional."

With an established reputation, peers and clients have been full of praise for Tomas Kontautas. "Tomas Kontautas is a good authority in insurance and banking," says one partner. "He's very very helpful. It's pretty comfortable. He helps me feel secure in the legal perspective," says one client.

In the last twelve months, the firm continued to attract some notable instructions. It advised BNP Paribas and JPMorgan Securities on the Rule 144A/Reg S issue of $750 million 6.125% notes due in 2021. It was only the second issue of notes under US dollars by Lithuania issued since 1997, and the first issue of notes of Lithuania in 2011. Additionally, the firm acted as lead counsel for Euler Hermes Kreditversicherungs, a leading credit insurance provider, in the sale of its subrogation claims portfolio. For the first time in Baltic history the whole recourse portfolio owned by the insurer was sold. Moreover the subrogation portfolio included claims that the client acquired through branches in Lithuania, Latvia and Estonia. Therefore, the agreement on the sale of the portfolio required meticulous drafting in order to secure enforceability in the mentioned countries. The firm also acted as local counsel for KBC Bank on the restructuring of a high value facilities agreement where KBC Bank acted as an agent in the syndicate, which extended the loan.

Tark Grunte Sutkiene is a well established firm with a sound reputation on the Lithuanian market. Market commentators have observed that the firm excels in specific pursuits. "They're quite strong in particular areas, acting for issuers in the local market. [They're visible with] large local corporates but in high profile foreign work and sovereign bonds they're not visible," says one partner, adding: "The main person that acts for local corporate issuers is Vidmantas Drizga". Clients have expressed their satisfaction and have described the team at the firm as "accessible", "responsive" and "innovative".

The firm has built up experience in regard to EU structural fund financing and has advised Government Ministries on the avenues to implement the EU Jeremie (Joint European Resources for Micro to Medium Enterprises) initiative. Moreover, the banking and finance group works closely with the European Investment Bank in relation to the implementation of the Jessica initiative on various issues pertaining to the funding of various energy saving projects. The practice group also focuses on aviation financing and leasing and has a sound track record in IPOs and other security offerings.

In the last twelve months, the firm has been active in some high value deals, especially with regard to matters pertaining to securitisation. The firm provided Lithuanian legal advice to Diaverum on a €614 million securitisation transaction. Additionally, the firm provided Lithuanian legal advice to Indorama Polymers with regard to securitisation and general transaction issues. It also assisted in the creation of security over the collaterals held in Lithuania as well as provided advice in relation to enforceability of transaction documentation against a Lithuanian obligor. This work took place in the context of one of the largest foreign investments made by a Lithuanian company to a foreign jurisdiction, at €108 million. Furthermore, the firm advised Volito Aviation Services and HSH Nordbank in connection to a $162 million lease of aircraft to Lithuanian air carrier Small Planet Airlines. It also assisted with regard to securitisation of the transaction. Finally, the firm advised private equity and venture capital manager, BaltCap, in the establishment of a €20 million venture capital fund. This transaction forms part of the EIF (European Investment Fund) managed Jeremie Holding Fund initiative in Lithuania.

Baltic Legal Solutions - Lithuania are yet to make an impact in banking and finance after the merger (which brought together legacy firms Jurevicius Bartkus & Partners and Kazlauskas & Degesys Solvings). "Baltic are not big, they are losing influence," says one partner. "They are a large firm by number but not active in finance deals and have no capital markets. They do bank lending and project finance from time to time," another partner says. Yet another competitor says: "They don't do much in banking and finance but have a strong litigation practice."

A rare international brand on the market Eversheds Saladzius lacks the capacity that drives some firms at the higher end of the table. The firm's peers note its lack of visibility on the market. "In tier four, Eversheds are not so visible in the market," says one partner.

In the last year, the firm has kept itself occupied by providing regulatory advice to ABN Amro and DnB Nord Bank. The firm is also advising Volvo Group on the setup of Volvo financial services in Lithuania.

The firm continues to advise Fortrum Group, a Scandinavian energy and heat company in Lithuania, on the financial structuring of its power plant project in Lithuania.

Another recent merger of former Regija Borenius and Mackonis & Partners Lawway into Borenius / Svirinas & Partners has ensured the enhanced capacity of the firm. It assisted in the refinancing of existing debt facilities of MCB Finance to Latvian bank Rietumu bank. The refinancing included an increase of €2 million and an extension of the term of the facility agreement.

The recent merger of Varul Vilgerts Smaliukas and Devyzis & Partners resulted in Law Firm VARUL. This firm is already starting to build itself a presence on the market. The firm advises the Lithuanian Government and Vilnius City Municipality and is presently conducting a feasibility study on the development of a €100 million 25,000 seat Multifunctional National Stadium through a PPP (public-private partnership) model.

Dispute resolution is the key strength of the law firm Motieka & Audzevicius. Nevertheless, the firm has been active in transactions and acted as legal counsel for the lead managers of a €70 million issue of dual tranche bonds for one of the top Russian banks.