DZP advises on the purchase of shares in PEWIK Gdynia by a fund from the Polish Development Fund group

DZP has advised the company PEWIK Gdynia and its shareholders, including the cities/towns of Gdynia, Reda, Rumia and Wejherowo, on the sale of a minority shareholding in PEWIK to the Local Government Investment Fund (LGIF), represented by the Polish Development Fund. 

In the transaction, the LGIF acquired approx. 25% of PEWIK’s shares and also concluded an investment agreement with its current shareholders and the company itself. The outcome was that the LGIF became a minority, passive shareholder in PEWIK. According to the investment agreement, it will not affect the company’s day-to-day management and after 20 years at the latest, as a result of redemption of the Fund’s shares, local governments will again become PEWIK’s sole shareholders.

The transaction was carried out thanks to the “Package for medium-sized cities” programme, which was set up in order to boost economic growth and improve the quality of life in medium-sized cities/towns in Poland. The Fund’s investment model is safe for local governments and their subsidiary companies. The Fund invests in well-managed, profitable municipal companies in a stable financial condition, thereby gaining a favourable capital investment and, for the municipalities, additional funds to carry out investments key to their development and the quality of life of inhabitants.

Within its advice, DZP took care of the formal side of the transaction, preparing the manner and procedure for selecting a share purchaser approved by the municipality board shareholders and coordinated performance of the procedure. DZP then drafted and negotiated the entire transaction documentation with the Polish Development Fund, mainly the investment agreement, share purchase agreement, and amendments to the articles of association due to arrangements made during the negotiations.

The transaction was handled by lawyers from the Infrastructure & Energy Practice, Tomasz Darowski (Partner) and Michał Przychoda (Senior Associate).