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

When it comes to lending recently the approach taken by banks has been one of qualified caution. There have been shades of conservatism, but the banks take a principled approach to any deal. "At the start of the crisis they had their hands tied, but they proceeded with caution and if the underlying asset is strong, they'll go for it," says one partner, adding: "Czech banks are in good condition. They kept their banking model simple and the Czech Republic benefited." Nevertheless, a lot of Czech banks are owned by other entities and parent entities have not been lending.

In the last year, as had been expected, credit committees eased their hesitancy in providing new funding to anyone other than the highest quality of borrower requiring the minimum of leverage. On refinancings, which has seen a large increase, banks sought to reduce their exposures and on prevailing facilities, rollovers became increasingly common. Where loans were made, there was greater caution being shown by the lenders in relation to documentation and the approach taken to the covenant package. Institutions such as the European Investment Bank (EIB) and the European Bank for Reconstruction & Development (EBRD), whose integration work had seemed to have been completed, became a critical source of liquidity again. On the other hand, increased pressure on bank margins was observed, and in some cases there was a return to pre-crisis levels.

Furthermore, up until the end of 2010, owing to the generous tariff guaranteed by the government, solar financing was by far the dominant activity, to the bewilderment of some: "Czech Republic is not known for its sunny beaches so I doubted this made sense," says one partner. Nevertheless, the incentives marked the drive to a "solar boom". However, this has been slowed by the realisation that the subsidies didn't match the start-up investment. Hence, the government imposed a type of withholding payment (in essence a de facto tax) on investors. "What they gave with their left hand they took with their right hand," says one partner.

Solar aside, banks are also looking actively into biomass, wind power and even hydropower, with biomass seen as the most sustainable.

In other areas of project finance, real estate finance has been subdued. However, some feel that this could be the trend for the near future. "Real estate is dramatic. Clients were begging banks three years ago and then this reversed 24 months ago and now there is a big upswing," says one partner, adding: "Real estate finance might be the flavour of the next one to two years".

Among Allen & Overy's competitors, there is reason for justification of its top tier standing. Though this does not mean that it has been free from criticism with one rival saying: "They're very reliant on the London office for work and management. The crisis hit and they had problems." "They're great in England but their presence is diminishing in the Czech Republic," says another rival. However, clients were full of praise for the firm: "I want to stress that A&O is instrumental in helping the whole banking community," says one client, adding, "The very notion that these opinions are available makes the local Czech market on par with other developed markets."

The firm's activity over the last year backs up its market-leading position (for borrowers and lenders) across a range of financing disciplines. In banking, the firm has been active in general lending, acquisition and export finance. Furthermore, in project finance, it has been involved in infrastructure, energy and real estate projects. Silvie Horácková has been described as having "done an excellent job" by one client and Robert Pavlu has been drawn out for praise.

Allen & Overy's Prague office was part of a team that advised ING, BNP Paribas, Raiffeisenbank and Société Générale on the €266 million financing for the acquisition of Ceské Radiokomunikace (one of the largest telecommunications companies in the Czech Republic) by three infrastructure funds operated by Macquarie.

The firm also advised the banks on the €100 million club financing for the acquisition of Europgas. This formed part of a deal where Komercní banka were involved as the escrow agent in regard to the swaps of assets and financial settlement among the KKCG group as it became owner of 100% stake in the Czech oil company Moravské naftové doly.

The firm also advised CSOB and HSBC in relation to a €160 million financing of working capital needs and the refinancing of existing facilities of the Bonatrans Group and ZDB Group (leading manufacturers of railway wheel sets and wires). This was required in an extremely short time frame of two weeks. Allen & Overy was also involved in the €196 million refinancing for the acquisition (98.6%) of Severomoravské vodovody a kanalizace Ostrava by Aqualia Gestión Integral del Agua (which was provided by UniCredit). The firm has also been active in cross-border and asset finance. Finally, in line with the growing importance of renewables, Allen & Overy has been involved in several major financings of photovoltaic projects.

"I would pick Clifford Chance to represent me", are the words of one of the firm's peers and there is a general consensus on the pedigree of the firm as a top-flight operator. It is also felt that the firm operates more independently in Prague than other international firms. Client feedback has also been positive. "They're one of the leading law firms in Czech," says one client, adding: "They're able to provide a quick response and are excellent in drafting legal documents."

The successful collaboration between the firm's banking, energy and real estate teams has helped consolidate the firm's top tier ranking. The firm advised on the €266 million financing of Macquarie European Infrastructure Fund's acquisition of Ceské Radiokomunikace. The financed transaction is the largest acquisition of 2010. Additionally the firm advised HSBC and Citibank Europe on a €27 million and €35 million syndicated financing acquisition of Skoda Machine Tool, finalising the "white wash" procedure relating to the financing of the Skoda Power acquisition by Doosan Heavy Industries Czech. The first ever completed "white wash" procedure under Czech law.

The firm also advised KKCG on the financing aspects of a restructuring in the KKCG Group, including advising on a €100 million syndicated acquisition facility for Ortoklas which was provided by Komercní bank, HSBC and RBS and on a €105 million intragroup bilateral facility, both relating to the acquisition of a 50% stake in Europglas from EON Ruhrgas International. The financed transaction was one of the largest acquisitions of 2010.

Clifford Chance has also been very active in cross border work. The firm was involved in ABN Amro Bank's financing of its acquisition by Gilde Buy-Out Fund IV of Teleplan International (a Dutch public company listed in Germany) and on the financing of Teleplan Prague.

The firm has also been highly visible in project finance with its involvement in UniCredit bank's €102 million facility agreement regarding the financing of and construction of the largest photovoltaic power plant in the Czech Republic for the client FVE Czech Novum. Moreover, the firm advised the banks Ceskoslovenská obchodní banka and Ceská sporitelna in the €100 million syndicated financing for the development of New Karolina Shopping Center in Ostrava.

Like its peers, White & Case's top tier ranking is confirmed by virtue of its ability to run and direct local and international deals. The firm's banking and finance team (with 20 members) is the largest in the country and is able to provide clients with optimal staffing on deals across all areas of financing. David Plch's peers have noted him as being among the market leaders in banking and finance. "Names which pop into mind, in banking and finance, as leading in Czech are for White & Case, Plch," says one such peer.

Clients were full of praise: "We are very comfortable with their company culture and their working skills," says one, "They are highly dedicated to their work and we can say that they are usually one step ahead of others in terms of their knowledge and awareness of surrounding commercial and legal environment".

In one such deal the firm represented BNP Paribas as it acted as security agent for the lenders and notes trustee in respect of a revolving credit facility provided to the CME Group (the operator of TV Nova, a leading television network in the Czech Republic). The transaction involved the refinancing of a loan provided by Erste Bank (from the proceeds of a revolving credit facility provided by the new lenders) and the issuance of senior notes by CME Group. The transaction also involved a complex shared security package created in favour of BNP Paribas.

The firm also represented Ceskoslovenska obchodni banka (a Czech subsidiary of KBC Bank) in relation with the €80 million club project and export financing provided to OJSC Naftan (a major Belarusian refining enterprise). This transaction was one of the first of its type and contained Belarusian law elements.

Another highlight saw the firm assist the Bonatrans Group and ZDB Group in connection with financing from Ceskoslovenska obchodni banka and HSBC in the cumulative amount of €160 million. The financing was provided for the purpose of refinancing existing loans. The complete refinancing and replacement of existing loans, guarantees and hedging lines were affected in the short time frame of two weeks.

White & Case's also demonstrated its experience in export finance last year advising Czech Export Bank in connection with export financing provided to Adularya Enerji Elektrik Uretimi for the purpose of purchasing mining equipment and the construction of a coal-fired power plant in Turkey.

The firm was also involved in the largest solar project in the Czech Republic to date when assisting FVE Czech Novum in connection with project financing (arranged for by UniCredit Bank Czech Republic) in respect to the financing and construction of a 35MW photovoltaic power plant.

"They are highly approachable and very responsive," says one satisfied client, adding: "we are very satisfied with their work mainly with their professionalism and their legal knowledge. With them we feel that our legal issues are handled properly resulting in favorable outcome."

PRK Partners occupy a unique space as the sole representative of tier two. "In my view, they're ahead of any other local law firm in terms of finance," says one partner and another agrees: "They're a solid banking firm and compete against us in local financing." Market commentators agree that the quality of the firm is sound but a top tier ranking is precluded by a decisive factor. "I will say that tier one firms will run and manage local and international transactions and PRK will be local counsel on international transactions or run domestic issues," says one competitor. Robert Nemec has been noted as someone who is "definitely visible" on the market.

The firm has been advising Komercní banka and RBS in connection with a syndicated loan to Bonatrans at €90 million. At €89 million, it also advised Equipment Finance Czech Republic in connection with intercreditor and other aspects of syndicated sale and lease-back financing for the refurbishment of rail carriages operated by Czech Railways.

In real estate finance, the firm has been advising Hypo Noe Gruppe Bank in connection with a €8 million secured acquisition loan to finance a real estate project of office building Avenir 3 in the Avenir Business Park in Prague. Moreover, PRK partners has been particularly active in renewable energy, having advised leading Czech banks (UniCredit Bank Ceská sporitelna, Raiffeisenbank, CSOB, Investkredit Bank) in connection with the financing of 75 photovoltaic power projects with a total capacity exceeding 100MW and €492 million.

Martin Aschenbrenner (Leading lawyer bio)

"Baker & McKenzie works for one of the large banks here but we do not see much of them on other transactions with other banks," says one partner. Undoubtedly, a major client for the firm is CSOB (Ceskoslovenska obchodni banka), which in 2011 mandated the firm to advise on the refinancings of Window Holding and Hame for over €100 million.

Additionally, the firm advised CSOB on the financing of an acquisition of a minority stake in a mining company, on the financing of the acquisition of KRPA Dehtochema and the refinancing of KVK group.

BHH is a reputable firm in the banking domain and last year acted as legal counsel to the Skoda Transportation Group in connection with a €91 million revolving syndicated loan facility arranged by Citibank Europe, Ceská spo_itelna, ING Bank and Komercní banka. The firm also acted as local counsel to a syndicate of banks led by Wells Fargo Bank in relation to a €161 million cross-border structured financing for the Unifrax Group.

There are mixed views about the overall quality of CMS Cameron McKenna's banking and finance practice but the firm's reputation in acquisition and real estate finance remains strong. One notable deal saw the firm advise Bainbridge Capital Retail Properties on a €181 million retail-based asset refinancing. In project finance, the firm has also been active in the recent solar energy boom, advising a host of solar plant developers and operators.

Glatzova & Co is a solid tier three firm in banking and project finance. The firm's strengths lie in transactional debt market work and financial regulation. Dana Schweigelová is a prominent figure in the firm and has recently become a member of the Appeal Committee of the Czech National Bank (the integrated financial market regulator). She is also a member of the project team organised by the Czech Banking Association, which is working on standard syndicated loan documentation for the Czech local market.

On the transactional side the firm advised Deutsche Bank Luxembourg among others in regard to a €16 billion facility consisting of a syndicated forward start facility, a multi-currency term loan and revolving credit facilities to Continental. The firm has also advised Raiffeisenbank with regard to project financing of the construction of photovoltaic power plants in the Czech Republic.

Kocián Solc Balastík is described as "very well equipped" and "knowledgeable" by competitors. In 2010/2011, led by Petr Kasik and Martin Krejcí, the firm has been active advising the Czech National Bank with regard to the settlement of relations between Agrobanka and certain shareholders. The firm has also been involved in the creation and implementation of the bank and non-bank client information registers in the country, a move aimed to ease information flow between banks and the non-bank financial sector.

It is no secret that Weil Gotshal & Manges has very close relations to state institutions and this is also apparent from the mandates it has received throughout 2010 and 2011. The banking practice lacks the bite of its corporate arm, however in financial services regulatory the firm advises big players including AnaCap Financial Partners.

A notable recent deal saw the firm advise AnaCap in connection with administrative proceedings for its acquisition of a qualified holding in Banco Popolare _eská Republika, in which the firm successfully secured approval for the acquisition from the Czech National Bank. This is significant as it was equivalent to obtaining a banking licence, which is fairly rare in the Czech context. The deal attracted a lot of attention in business circles as it was the first COC (certificate of conformity) granted in many years to a private equity investor entering the Czech banking field.

The firm has also been active in project finance relating to infrastructure and in one deal advised the Czech Government and Road and Motorway Directorate in regard to the €2.4 billion financing for the construction and 30 year operating concession of part of the D3 Highway. Additionally the firm advised the Ministry of Finance on regulatory aspects of the environmental clean-up PPP (public-private partnership) project.

Led by Daniel Weinhold, Weinhold Legal has been fairly active in 2011. The firm advised UniCredit Bank in connection with syndicated financing provided to one of the major Czech players in the food processing industry.