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act BSWW advises Strabag Real Estate on hotel sale

act BSWW consulted Strabag Real Estate on a transaction involving the sale of a downtown Warsaw hotel.

Motel One at Tamka street features 12,700 m2 of usable area, eleven levels and over 300 rooms. The Fryderyk Chopin Museum is located nearby.

The scope of the law firm’s services included due diligence audit and acquisition of land on which the hotel was supposed to emerge, as well as drafting and negotiations of the construction works agreement, subsequently followed by the building’s forward purchase.

The project was handled by Marek Wojnar (attorney-at-law and Managing Partner at act BSWW) and Marta Kosiedowska (legal counsel, Partner).

“This is Poland’s first Motel One (developed by our Client) that follows the new standards set by this hotel chain,” says Marta Kosiedowska.

“This is yet another large transaction that we have handled for Strabag Group. It gave us an extra boost of satisfaction since it was carried out in the hotel property market that requires vast knowledge and extensive skills. We are pleased that that the Client placed its trust in us with respect to this project that turned out to be a success,” adds Marek Wojnar.

New rules for public offerings

Prospectus Regulation (no. 2017/1129) takes effect – changes and transition period for capital markets

Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC applies from 21 July 2019 (“Regulation 2017/1129”).

It is worth noting that works on adjustment of the provisions of the Polish Act of 29 July 2005 on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organized Trading, and Public Companies (the “Public Offering Act”) have not been completed. In case of any discrepancies between Regulation 2017/1129 and the Public Offering Act, the former shall prevail.

The Polish Financial Supervision Authority (“UKNF”) has published an interpretation of regulations in the transition period, i.e. until amendments to the Public Offering Act are implemented.

Below is a summary of key changes.

1) Changes to the “public offer” definition

Pursuant to Regulation 2017/1129, the “offer of securities to the public” is a “communication to persons in any form and by any means, presenting sufficient information on the terms of the offer and the securities to be offered, so as to enable an investor to decide to purchase or subscribe for those securities.” This means that each offer will be public in nature, irrespective of the number of recipients at which it is addressed. UKNF notes that an offer intended for a single investor will not be regarded as a public one. The current version of the Public Offering Act will apply nonetheless to securities which are not covered by the scope of Regulation 2017/1129 (e.g. offers of some public benefit organizations).

2) Prospect as a general rule (with some exceptions)

Pursuant to Regulation 2017/1129, securities shall only be offered to the public in the European Union after prior publication of a prospectus. However, there is a range of exceptions to that rule. The aforesaid obligation will not apply to: (i) an offer of securities addressed solely to qualified investors; (ii) an offer of securities addressed to fewer than 150 natural or legal persons per Member State, other than qualified investors; (iii) an offer of securities whose denomination per unit amounts to at least EUR 100,000; (iv) an offer of securities addressed to investors who acquire securities for a total consideration of at least EUR 100,000 per investor, for each separate offer; or (v) securities offered, allotted or to be allotted in connection with a merger or division, provided that a document is made available to the public, containing information describing the transaction and its impact on the issuer.

The current thresholds will continue to apply.

An offer of securities with the issuer’s or seller’s expected gross consideration, together with proceeds from the past 12 months, is at least EUR 100,000 but below EUR 1,000,000, will continue to entail an obligation to publish a prospectus.

That obligation does not apply if the total gross consideration over a 12-month period in the European Union is below EUR 100,000.

An offer of securities with the issuer’s or seller’s expected gross consideration, together with proceeds from the past 12 months, is at least EUR 1,000,000 but below EUR 2,500,000, can still be based on the memorandum discussed in article 41 of the Public Offering Act.

3) Bonds

Offering of bonds will be governed by Regulation 2017/1129, which – to the extent requiring publication of a prospectus – supersedes the Public Offering Act’s provisions referred to in article 33 item 1 of the Bonds Act of January 15, 2015 (Dz. U. / Journal of Laws of 2018, item 483). In case of some “offers of securities to the public” (as defined in Regulation 2017/1129), a prospectus might not be required. However, in the transition period, the Public Offering Act’s provisions imposing the obligation to make an information memorandum might apply (e.g. in case of an offer of up to EUR 2,500,000, addressed to over 150 non-qualified investors).

For certain public offers (e.g. one listed in article 1 section 4 item b of Regulation 2017/1129, i.e. an offer of securities addressed to fewer than 150 natural or legal persons per Member State, other than qualified investors), the obligation to prepare a prospectus and have it approved does not apply. The Public Offering Act’s provisions requiring the publication of a memorandum will not apply, either. In such case, bonds can be offered on the basis of a purchase proposal.

4) (Non-)mandatory intermediation

Despite a wider definition of an “offer of securities to the public,” until the definition used in domestic regulations is adjusted to Regulation 2017/1129, the mandatory intermediation of an investment firm will not be required in case a given offer is considered as public (as defined in Regulation 2017/1129) but does not match the definition of the “offer of securities to the public,” as included in the previous regulations.

5) Certificates offered by non-public closed-end investment funds

According to UKNF, an investment fund, as discussed in article 15 section 1a of the Investment Funds and Management of Alternative Investment Funds Act of 27 May 2004 (Dz. U. / Journal of Laws of 2018, item 1355, as amended), should (as a closed-end fund) apply the provisions of Regulation 2017/1129 if it addresses the offer to more than one recipient. Non-public funds, which are not intended for a single investor (acquirer of investment certificates), are subject to general rules for public offering, as specified in Regulation 2017/1129. UKNF notes that offers aimed at fewer than 150 recipients in a given Member State do not entail an obligation to prepare any information document.

6) New prospectus types

Regulation 2017/1129 also discusses new prospectus types: a universal registration document for frequent issuers whose securities are admitted to trading on a regulated market or MTF, and a simplified prospectus for secondary offers. There is also a EU prospectus intended for the growth of small and medium enterprises. The idea is for the new documents to simplify and speed up the process of capital-raising. The structure of the prospectus is also about to change, becoming shorter and more comprehensible to investors.

7) Regulations concerning pending procedures and offers

In case of prospectuses that have been approved before 21 July 2019, the public offer and its promotion should be based on the previous regulations (even after 21 July 2019). The same applies to offers based on a memorandum that was approved or published before 21 July 2019. If the procedure has not been completed until 21 July 2019, and Regulation 2017/1129 specifies that in case of a public offer or admission to trading, no information document (that is subject to approval of a supervisory authority) is required, the administrative procedure should be discontinued. In all other cases, the document will need to be adjusted to new regulations, while promotion-related activities will be governed by Regulation 2017/1129.

Although the aim of the new regulations is to make it easier to raise capital, streamline administrative procedures and enhance investor protection, it might be difficult at the beginning to get used to the new legal situation, especially given the fact that Polish laws are not adjusted to the EU ones, and the supervisory authority needs to develop practices for application and interpretation of new regulations. It is necessary to follow amendments to the Public Offering Act and the supervisory authority’s practice, incl. UKNF’s position. All of them will have an impact on the extent to which objectives will be fulfilled.

In case of any questions about the issues presented herein, please feel free to get in touch with us.


Piotr Wojnar
Attorney-at-law | Managing Partner
+48 22 420 59 59

Piotr Smołuch
Attorney-at-law | Managing Partner
+48 22 420 59 59

Małgorzata Stefaniak
Legal counsel | Senior Associate
+48 22 420 59 59

New obligations of partnerships and companies: Central Register of Beneficial Owners

The Central Register of Beneficial Owners (hereinafter referred to as the “Register”) is supposed to be implemented in Poland on October 13, 2019. This is related to the Anti-Money Laundering and Counter-Terrorism Financing Act, which came into effect as of July 13, 2018 (the “AML Act”).

The establishment of the Register will entail additional obligations for partnerships and companies, as well as the possibility to impose a financial penalty for failure to meet those obligations.

Below you will find key assumptions related to the Register:

1. Partnerships and companies (except for professional partnerships [PL: spółki partnerskie] and public companies, as defined in the Act of July 29, 2005 on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organized Trading, and Public Companies) will be obliged to become listed in the Register.

2. Relevant submissions can be made by individuals authorized to represent partnerships/companies.

3. Entities which entered the National Court Register until October 13, 2019 will have to apply for an entry in the Register until April 13, 2020. Entities which entered the National Court Register after October 13, 2019 will have to apply for an entry in the Register within 7 business days of becoming listed in the National Court Register.

4. Submissions need to include the following:
a) the applicant’s own details, i.e. business name, legal form, registered office, KRS (National Court Register) number, and NIP (tax identification number); and
b) details of the beneficial owner and member of a corporate body or shareholder authorized to represent the partnerships/companies listed in article 58 of the AML Act, i.e. first and last name, nationality, country of residence, PESEL or date of birth (if no PESEL number has been assigned), and information about the shares or interest held by the beneficial owner.

5. In order to simplify the definition of the “beneficial owner,” provided in the AML Act, and for the purposes of this legal alert, we can assume that the beneficial owners of partnerships/companies are individuals who directly or indirectly hold over 25% shares/voting rights (incl. as a pledgee or user, or on the basis of arrangements with other holders of voting rights). In case it is impossible to determine (or there are doubts as regards) the identity of beneficial owners (e.g. due to a dispersed shareholding structure), and there is no suspicion of money laundering or financing of terrorism with respect to a given entity, it is presumed that the beneficial owners are individuals who hold senior management positions.

6. Along with the registration application, it is necessary to file a statement of accuracy of the data submitted with the Register. Such statement is subject to criminal liability for fraudulent misrepresentation.

7. The person submitting information about beneficial owners and updates to such information bears liability for damages resulting from publication of inadequate data with the Register.

8. The Register will be publicly available. The data included in it will be covered by the presumption of truthfulness. Information about beneficial owners can be obtained free of charge.

9. A partnership’s/company’s failure to meet the obligation to apply for an entry in the Register carries a fine of up to PLN 1,000,000.00.

Objectives of the Register:
1. Ensuring greater transparency of commercial transactions in Poland and across EU.
2. Identifying potential criminals or those who evade taxation by hiding behind complex corporate structures.
3. Offering access to comprehensive information about potential business partners.
4. Boosting the society’s trust in the reliability of the financial system and financial transactions.

It seems, however, that the Register will not be established until the deadline specified in the AML Act. As of the alert date, the Ministry of Finance released an announcement that the expected start date of the public tender for the Register’s implementation is Q4 2019.

In case of any questions about the issues presented herein or other AML or counter-terrorism financing matters, please feel free to get in touch with us.

Rafał Smolik
+48 22 420 59 59

act BSWW advised Echo Investment on its Łódź-based project

Echo Investment, Poland’s leading developer, has laid the cornerstone for Fuzja, a section of Łódź that will combine modern urban features with the historical spirit of Księży Młyn (a complex of textile factories). The company has started restoring the former Scheibler factory.

The multi-stage project will see the development of residential, commercial and urban spaces. The investment area covers 7.7 hectares. The mixed-use project will offer approx. 90,000 m2, seamlessly blending different types of spaces into one development. This is going to be a new landmark in Łódź.

“Echo Investment’s strategy focuses on the so-called ‘destinations,’ i.e. locations that help cities grow, where people can work, live and spend their free time. While creating them, we make sure to respect their history. The investment project at Tymienieckiego street in Łódź is going to be one of them. It will cover nearly eight hectares on the site of the former Scheibler factory, with the historical power plant situated in its heart,” says Nicklas Lindberg.

The project will be made up of 20 buildings serving different functions, 14 of which are tastefully restored historical buildings. The historical building of the former power plant will be the beating heart of this area. The project also includes urban squares, common areas and green zones, with a total area of almost 4 ha.

act BSWW was advising Echo Investment on the acquisition of Elektrownia RE sp. z o.o., the company that owned the investment property. The scope of legal consulting services covered all stages of the transaction: legal and tax due diligence audit of the company and the property, followed by support in negotiations of transaction-related documents (incl. the share purchase agreement).

The law firm’s team was made up of Michał Wielhorski (team leader, Managing Partner at act BSWW), Katarzyna Marzec (Partner) and Mateusz Prokopiuk (Senior Associate).

“We are glad to advise on real estate projects that involve urban renewal. Thanks to them, historical sections of cities regain their former glory, turning into unique and bustling venues,” says Michał Wielhorski.

Practitioners’ Guide for M&A in Europe

A practical guide for international investors, managers and lawyers in English about the most important topics in cross-border transactions for the most relevant economies in continental Europe.

The guide, written by experienced act legal M&A lawyers, offers short and practical answers to legal, tax and financial issues that investors face connected to cross-border and domestic investments. In this comprehensive handbook we do not quote legal norms but briefly and comprehensively summarize the different aspects to be considered in a M&A transaction:

  • most important non-legal soft triggers for a successful acquisition
  • players in M&A transactions and transaction cost triggers
  • main transaction documents
  • purchase price
  • key employment issues and influence of employees and trade unions in a transaction
  • relevant types of legal entities
  • tax aspects
  • formal requirements for a transaction
  • share deal vs. asset deal
  • other special types of transactions
  • obligations / liabilities due to negotiations
  • disclosure obligations in connection with a transaction
  • legal restrictions on acquisitions
  • distressed transactions and acquisitions out of insolvency

Click here to receive a free sample of the M&A practitioners’ guide.

act BSWW advises Adventum on acquisition of Poznań Financial Centre

Adventum, a real estate investment fund operating internationally, has acquired Poznań Financial Centre (PFC), marking the first investment the fund has made in Poland.

act BSWW was advising Adventum throughout the transaction involving the acquisition of shares in PFC. The scope of legal services included a due diligence audit of the real estate, preparation of transaction-related documents, as well as support in negotiations and transaction advisory.

The law firm’s project team was made up of Marek Wojnar (Managing Partner, attorney-at-law), Marta Kosiedowska (Partner, legal counsel), Mateusz Prokopiuk (Senior Associate, attorney-at-law) and Katarzyna Góra (Senior Associate, attorney-at-law).

“We appreciate having been given the chance to advise Adventum on their first acquisition in Poland. We hope it is the first in a string of successful projects,” says Marta Kosiedowska.

“Supporting a new player entering the Polish market is especially exciting. We are happy to be handling the Client’s subsequent transactions,” adds Marek Wojnar.

Poznań Financial Centre is an office building situated in the Old Town of Poznań. The seventeen-floor building has 18,000 sq.m. of gross leaseable area.