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

In the last 12 months, the Romanian capital markets have not improved. In 2008, the markets suffered profoundly in the wake of the financial crisis. The following year was represented by a muted bounce back and in 2010 the markets lay idle. At the end of 2010, the capitalisation of the Bucharest Stock Exchange's (BSE) regulated market was €23.9 billion. To put some perspective, the capitalisation of the only listed foreign issuer, Erste Bank Group (EBS) was €13.7 billion. Trading volumes hit a low point as brokers registered negligible income and even losses, as transactions of professed significance remained a rarity.

Any such activity in the beleaguered market was seen on the equity side. There was only one attempt at an IPO and this proved fruitless. Hidraulica Plopeni intended to sell close to 137 million shares, but only 4,180 of these shares were subscribed to. As a result, this endeavour failed. Regardless, as one partner says: "You can't have a capital market on one issue."

Nevertheless, the most important event on the Romanian capital markets last year was the self-listing of the BSE on tier II of its own regulated trading market. This was carried out on the basis of an admission to trading prospectus without an IPO. In contrast to BSE's listing, one can argue that the most important listing on the market, symbolically, was the administrative listing (without a public offer) of Fondul Proprietatea (the Property Fund) in January 2011. The fund assumes its importance from the special condition that shareholders must be among those dispossessed by the state during communist Romania. It is important to stress the symbolic nature of this listing. "The property fund was listed but it's not a major transaction. It was a technical listing, says one partner, adding: "It became major because the state delayed it. But, when there was the political will to list it the process was easy."

Other developments have been a cause for enthusiasm. In mid 2010, eager to meet its IMF obligations, the Romanian state announced the sale through the BSE of stakes held by the Romanian Government in Petrom, Transelectrica, Transgaz and Romgaz, and the listing of some private companies. These developments proved to be a source of work for law firms. "The state is very committed to these goals," says one partner, adding: "Petrom is extremely challenging and needs a huge team". Unfortunately for the market this deal has stalled in light of recent events in Greece and the US. "The capital markets environment took its toll on the transaction. It's unfortunate that the Greek crisis has made investors weary," one partner says.

Another interesting development and in truth, a regional trend has seen investors' attention divert to the Polish market. "Several investors are considering the WSE (Warsaw Stock Exchange). They're not afraid of the Romanian market but there is more potential in Warsaw and Vienna," one commentator says.

The debt side of the capital markets has been even quieter. "There are some initiatives on the local market. There are some initiatives on corporate bonds but it's not that frequent in Romania," says one partner.

Despite the bleak outlook there is some cause for optimism. The year has seen the creation of a capital markets specific working group. This comprises of nine major banks and investment firms and eight major law firms. The goal of these players is to identify problems and obstacles with the present market as well as coming up with solutions on how to tackle them. Furthermore, the American Chamber of Commerce has also set up a capital markets task force with the same purpose, for the most part.

There is little doubt of Badea Clifford Chance's credentials among competitors and clients. When asked which capital markets practice is the strongest on the market, one competitor states: "Well that is the million dollar question, Badea Clifford Chance." Such sentiments as to the capabilities of the firm remained unchallenged. "I've met them on several transactions. They're very involved," another competitor says.

The story on the client side doesn't alter this perception either. "A quite great experience, extremely efficient, quick, punctual and correct," says one client, adding: "They have a great understanding of the international framework. They applied international standards to local regulations. It was an innovative and creative deal, as it was the first of its kind."

In the last 12 months, the firm was involved in the largest bonds programme in Romania when it supported Société Générale on the €7 billion MTN programme of the Romanian State. Furthermore, the firm advised Erste Group Bank as arranger on the update of Banca Comerciala Romana's €3 billion MTN Programme. This, one should remember, was the first MTN programme launched by a Romanian entity. In the range of €150-200 million, the firm also advised UniCredit, Raiffeisen and ING on a secondary public offering by a large listed Romanian company.

Daniel Badea has been active in all the major deals of the firm and competitors routinely cite him as a leading lawyer. Additionally, Radu Ropota is described as "one of the stars in the capital markets".

Nestor Nestor Diculescu Kingston Petersen (NNDKP) is a solid tier one firm whose history precedes it. Since the fall of communism, the firm has been able to "organise themselves to grow organically" and its reputation is testament to this success. "Nestor has a good team," says one partner. Competitors have praised Gabriela Ontica on account of her expertise on the capital markets.

NNDKP regularly advises state entities and domestic and international financial institutions. Furthermore, the reputation of the firm derives from its role on landmark securities transactions and the largest ever IPO in Romania.

"It is one of the top three law firms that is Romanian owned," says one client, adding: "I prefer Nestor because you get the same quality at a lower price. International firms have very high rates."

This year, the firm advised ING on securities law aspects related to the listing of the fund Fondul Proprietatea. The bank was one of the members of a syndicate appointed by Franklin Templeton Investments for the purpose of listing the fund on the Bucharest Stock Exchange. The firm was also involved in one of the most complex deals on the capital markets of 2010. This was a combined redemption and conversion of a bond issue of Rompetrol Rafinare, which had been fully acquired by the State in 2003 and matured in late September 2010. Illustrative of the high number of squeeze-out procedures on the market and indirect offers obligations becoming binding due to regulatory changes NNDKP advised the Ford Motor Company on the legal aspects pertaining to claims filed by minority shareholders contesting in court the squeeze-out procedure regarding Automobile Craiova shares.

Manuela Nestor is a well-respected figure and has built a formidable reputation. "Ms. Nestor's advice I value much," says one client, adding: "Many lawyers can kill a deal because they're too much of a lawyer. Ms. Nestor knows when to put the commercial hat on and when to put the lawyer hat on."

The big change this year sees Schoenherr si Asociatii break into the top tier. There has been general agreement among competitors as to Schoenherr's visibility and class in the capital markets. "Schoenherr is a firm I can trust," says one partner. "Schoenherr had several mandates last year," says another competitor, with yet another adding: "Schoenherr are good in the capital markets."

The firm is very visible on the capital markets and has attracted some of the leading mandates of late. The firm advised managers Raiffeisen Capital & Investment, ING and BRD - Société Générale on the listing of Fondul Proprietatea on the Bucharest Stock Exchange. This was a major capital markets transaction last year as the property fund has historical significance and has a significant net asset value at €3 billion. As a consequence of the listing of Fondul Proprietatea, the trading volume on the Bucharest Stock Exchange has all but doubled.

Narcisa Oprea has been singled out and praised for her activity in the capital markets. "She's done a good job," says one peer, adding: For years she's been at the forefront of the capital markets". Narcisa led a team that advised Petrom and several of its Romanian subsidiaries on a corporate restructuring process that led to a series of mergers and a spin offs, which were geared to consolidate the activities of several group companies into one single company owned by Petrom. This type of spin off is the first of its kind in the Romanian regulated market and led to several highly complex capital markets aspects that had to be attended to for the successful implementation of the project. Finally, in the last 12 months, Schoenherr also acted for joint global coordinators Citibank and RBS with regard to a €750 million high-yield bond, a €1.3 billion high-yield bond and for lead book runner Deutsche Bank in relation to a €1 billion high-yield bond.

Tuca Zbârcea & Asociatii presence in the top tier is recognised. The firm, although still considered "relative newcomers" has "a good position" when compared to others. "Tuca has the largest turnover but works a lot with the state," says one partner. Despite tough market conditions, the firm has remained the top financial performer on the market for the third year running. The firm continues to expand regionally, and adds a strategic alliance with Turcan & Turcan of Moldova to its representative office in Madrid. Internally, the firm has promoted two managing associates, Silvana Ivan and Mihai Dudoiu, to partner roles.

The firm continues to be active as the only legal advisors to the Bucharest Stock Exchange (BSE). Such advice covers a range of matters including its activities on the capital markets, the relationship with NSC and the potential liability of BSE. The firm has also assisted BSE in various legal disputes concerning the alleged infringement of the capital market rules on shares trading. Additionally, the firm continues to be retained by the Central Depository, the sole local depository, clearing and settlement system serving the BSE. Furthermore, the firm is supporting a major Asian investment company's takeover process in respect of a Romanian listed company. This entails the analysis of numerous issues regarding the capital markets regime applicable in Romania and the possibility to implement various structures.

Finally, the firm is also part of the "Working Group on Reform of the Romanian Capital Markets" geared to optimising the current capital markets legal framework.

This year, CMS Cameron McKenna moves up a tier into the top flight. With capitalisation of the markets set to increase, the firm has attracted some high profile mandates. Nevertheless, there have been concerns that the firm lacks a capital markets specialist. "Simon Dayes is a good guy, although, now they have no expert on the capital markets," says one partner. However, the firm has recently bolstered its London office with the recruitment of leading US capital markets lawyer Daniel Winterfeldt. Daniel is now head of the international capital markets group and has already made an impact. This combined with the fact that the firm has restructured the team locally, puts it in good stead.

At €485 million and €605 million, the firm is supporting the Romanian Government, as legal advisors to the consortium led by Renaissance Capital on the secondary sale offering of shares in the largest Romanian company, Petrom. Significantly, this is the largest secondary public offering to date on the Bucharest Stock Exchange (BSE). Furthermore, the firm is acting for an international finance institution in another major capital markets transaction that is among the largest of the year. Furthermore, at €60 million, the firm advised the Bank of Cyprus in the acquisition of a minority stake (less than 10%) in Banca Transilvania, listed on the BSE.

This year, in the capital markets, Musat & Asociatii drop a place into the second tier. There is little doubt that Musat & Asociatii is a known firm that has prominent standing by virtue of its history. However, competitors have noted its decreased visibility of late. "They're not very much active on the capital markets side," says one partner. "I'm not very aware of Musat. They did win the mandate to represent the state for Trans electrica."

Clients, on the other hand, have been thoroughly satisfied by the firm's performance. "Working with Musat & Asociatii has constantly been very satisfying; they know our business very well, have great command of the legal matters and understand perfectly our requirements," says one client, adding: "They are a top law firm in Romania, having been involved in major transactions over the years, they have gained excellent commercial skills and our experience with them has always been flawless, so their contribution is not only appreciated, but also represents a good value for money,"

This year, as alluded to earlier, the firm is advising the Ministry of Economy and the Office for state ownership and privatisation in industry (OPSPI) in regard to the secondary public offering on the Bucharest Stock Exchange for the purposes of the sale by the Romanian State of 15% of the share held in Transelectrica. To this end, at €50 million, Musat & Asociatii is providing a comprehensive service to the Romanian State, including selecting the intermediary, structuring and implementation of the sale process, as well as providing legal advice in all matters pertinent to the secondary offering. Furthermore, the firm is Advising Rompetrol Group in connection with the €90 million acquisition of the remaining free float of Rompetrol Rafinare, so far the most successful mandatory public offer performed on the Bucharest Stock Exchange. The firm is also providing legal advice in all matters pertaining to the mandatory public offering of Rompetrol Well Services.

Catalin Baiculescu has been the subject of praise, with one client describing him as: "A very competent lawyer, extremely professional and incredibly analytic, providing us first-rate legal advice."

Popovici Nitu & Asociatii is one of Romania's well established firms that has plenty of history behind its name. Led by Alexandru Ambrozie and Bogdan Stoica, the firm has attracted some interesting mandates this year.

The firm has been busy advising the Franklin Templeton Investment Management Limited on the €450 million buy-back programme to be launched by Fondul Proprietatea. This will be the largest buy-back programme realised on the Bucharest Stock Exchange.

The firm also advised ArcelorMittal on the squeeze-out of minority shareholders from Romportmet and the delisting of the company. In fact squeeze outs and delistings proved a lucrative area for the firm which also advised on similar transactions for for Contips to Ventilatorul Real Estate and for Rompetrol Rafinare.

Looking forward, RTPR in association with Allen & Overy is a serious contender for a higher ranking and since entering the rankings for the first time last year it has continued to build market share.

Led by Costin Taracila, the capital markets practice is progressively active. The team in mid-2011 was engaged advising the Ministry of Public Finance on the establishment of an up to €7 billion MTN programme. Furthermore, the firm advised KBC Securities in the intermediation of the €107 million sale by the European Bank for Reconstruction and Development (EBRD) of its shareholdings in BRD - Group Société Générale on the Bucharest Stock Exchange.

White & Case Pachiu retains its position in the third tier this year. The firm has had some interesting mandates and played a role in a historical deal for the market. It advised Fondul Proprietatea in the procedure for admission to trading in the regulated market managed by the Bucharest Stock Exchange.

Bulboaca & Asociatii enters the rankings at the fourth rung. The listing reflects the firm's increasing sophistication which was displayed in advising the Romanian government in its only Eurobond issue of 2010. The issue was of €1billion bonds and proved a financial success, having been oversubscribed five times.

Salans advised Continental and provided legal support with regard to specific Romanian legal aspects linked to three subsidiaries of an international corporation. This was for the bonds issuance made by one of the subsidiaries of senior secured notes at an aggregate of €3 billion.

Stoica & Asociatii is a small firm with a litigation focus. It was recently involved in the Petrom secondary offering though in purely legislative regulatory issues. In this capacity, the firm dealt with potential legislative amendments to push the transaction through and advised on privatisation matters.

Radu Rizoiu is a well respected practitioner in the market. "He's a great guy," one rival partner says.

Zamfirescu Racoti Predoiu has had a fair year and is advising Vimetco and Conef in the planned secondary public offering of Shares in Alro (of up to 20.96%).

Vilau & Mitel was formed in 2003 by ex Musat & Asociatii partners Dragos Vilau and Sorin Mitel. It provides a cost effective Romanian alternative to the larger firms.

In 2011, the firm advised Bayern with regard to the Romanian regulatory requirements applicable to its €3 billion share capital increase, which led to the acquisition by the Free State of Bavaria of MKB Romexterra Bank resulting in the acquirers total control of the bank.