DZP advises on the purchase of shares in WiK Opole by a PFR group fund

DZP has advised Wodociągi i Kanalizacja w Opolu sp. z o.o. and Opole Municipality on the sale of a minority shareholding in WIK to a Local Government Investment Fund, represented by the Polish Development Fund. 

In the transaction, the Local Government Investment Fund [LGIF] entered into an investment agreement with Opole Municipality and the Company itself under which it acquired 25% of WiK shares for approx. PLN 100 million. As a result, LGIF became a minority, passive shareholder in WiK. According to the investment agreement, it will not affect the company’s day-to-day management and in approx. 20 years, as a result of redemptions of the Fund's shares, local governments will again become the sole shareholders in WiK.

The transaction was carried out thanks to the "Package for Medium Cities" programme, which was set up to stimulate economic growth and improve the quality of life in medium-sized cities 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 with stable financial standing, thus obtaining a favourable capital investment, and for municipalities it means additional funds to carry out investments important for their development and the quality of life of their inhabitants.

DZP handled the formal side of the transaction, preparing the manner and procedure for selecting a buyer accepted by the City Council and coordinated the procedure. DZP then developed and negotiated the whole of the transaction documentation with the Polish Development Fund, primarily the investment agreement, the share purchase agreement and amendments to the articles of association based on the arrangements made during the negotiations.

The DZP lawyers who handled the transaction were Tomasz Darowski (Partner) and Michał Przychoda (Senior Associate) from the Infrastructure & Energy Practice.