Reff & Associates assisted clients in transactions worth over one billion Euroin 2009

Reff & Associates, the correspondent law firm of Deloitte Romania, assisted clients in transactions worth over one billion Euro in 2009, a higher volume compared to previous years, despite a difficult market context in the main areas of practice, namely mergers and acquisitions, finance and banking, and real estate.

Naturally, the nature of mandates has changed, with debt restructuring gradually gaining an increasing share in the company’s activity against funding/financing contracts. Surprisingly enough, the most important transactions did not include credit restructuring, but new financing agreements for hundreds of millions of Euros in real estate development and infrastructure works.

One such deal was providing legal assistance to Romstrade throughout the successful negotiations of a 140 million Euro financing agreement based on discounting promissory notes, with Credit Suisse. The contract was signed in March 2009 and the funds are aimed at financing infrastructure works.

In addition, Reff & Associates provided legal services in one of the most important real estate financing agreement signed in 2009, which was announced at the beginning of September. With a multidisciplinary Deloitte team, including lawyers, financial and fiscal consultants, Reff & Associates provided legal assistance to INR Management Real Estate in view of obtaining tens of millions of Euro from BCR.

Given the extensive M&A expertise and solid experience in the real estate market, Reff & Associates provided legal assistance for one of the few acquisition agreements in the field executed last year. Thus, the Firm has offered legal services to the real estate investment fund New Europe Property Investments plc (NEPI) in view of purchasing a retail park developed by Belrom Real Estate in Braila. The value of 63 million Euro and the complexity of the deal structure had the media define the agreement as “the deal of the year in retail”. The transaction is part of a more complex acquisition project based on which NEPI will take over three retail parks from this company, a project which has been slightly delayed due to the need of recalibrating certain business formulas.

Several other transactions were finalized (or have significantly advanced) with the Firm’s support last year. Among others, the lawyers of Reff & Associates provided assistance for the finalization of the Romtrans - DB Schenker merger, after the Romanian company was bought at the end of 2008.

“Without a doubt, 2009 was a difficult year, with many changes whose effects will continue to be felt beyond the end of the current economic crisis. At the beginning of the year, the local market undertook a sudden shift from the investing effervescence to an almost total block: the sharp decrease in foreign investments, a freeze in financing and acquisitions, paralysis of the development projects. Lawyers have experienced this decline in full, the areas with the largest share of revenues being affected. Fortunately, we were already operating on principles that have now become essential conditions for success on a more difficult market: client relationship, close communication, business pragmatism, personal involvement of partners in projects, seniority of teams. Our law firm has consolidated its team in the last part of the previous year, by recruiting two new lawyers with solid experience in real estate and M&A. We have increased our involvement in relatively new areas such as fiscal and commercial litigation, insolvency, energy, public sector. We have provided legal advice and assistance in the field of company restructuring either through large spin offs or merger operations, or through reorganization of various departments based on the current market conditions, including individual or collective lay-offs,” said Alexandru Reff, Partner in Charge, Deloitte Tax & Legal. “More importantly, we have succeeded in maintaining a high level of activity in critical areas (M&A, financing, real estate), adapting to the new specifics of the relevant fields”.

Insolvency is another area often requested during 2009 with a substantial potential this year.

“We have assisted both creditors (mostly banks) and borrowers either in the pre-opening phase of the insolvency proceedings or during the procedure itself”, Partner Andrei Burz-Pînzaru said. “I anticipate that 2010 will be characterized by a higher prevalence of specific problems of insolvency, but also by an increase in requests for assistance in projects related to the purchase / sale of distressed real estate assets / distressed M&A”.

“On the other hand, credit restructuring projects will continue”, Burz-Pînzaru added. “We may witness the resumption of the corporate credit, even if at a smaller volume and - especially - lower frequency than those recorded in previous years, but we expect a volume increase against 2009”.

Reff & Associates is the correspondent law firm of Deloitte Romania, fully integrated with the Deloitte multi-disciplinary advisory practice and affiliated to a network of law firms and legal departments working with Deloitte all over the world. Deloitte’s correspondent legal practice has been providing assistance to clients in Romania on various matters pertaining to mergers and acquisitions, corporate and commercial law, finance, banking and capital markets, real estate, project finance, employment, competition, fiscal and commercial litigation, and intellectual property.