Blog & News

Turnaround Management Association Romania launch, Bucharest, Romania, 2012

Twitter feed

Nigel Davies tracks several feeds from international financial institutions, economists, embassies and other relevant sources specialising in Central and South East Europe, Eastern Europe, Central Asia and Africa. You can read the news feeds and links to interesting articles and publications here.

EBRD President's speech on joint investments with Israel coincides with Wyn River's own country coverage expansion

The President of the European Bank for Reconstruction and Development has just given a speech covering both the latest expansion of its operations into North Africa and parts of the Eastern Mediterranean, as well as several co-investments into technology operations with Isreali companies across much of Eastern Europe.  You can read President Suma Chakrabarti's interesting presentation in EBRD's press release.  By coincidence, Wyn River is pleased to confirm this week that Len Judes has joined as the Wyn River associate for both Cyprus and Israel, also bringing his own deep connections via Israel to technology investments in Central and Eastern Europe, noticably Lithuania.  Len is the founder of the Lithuanian Israeli Technology Hub as well as having considerable engagement over the years with several associated Chambers of Commerce, including the British Israeli Chamber.  As has been pointed out by many commentators, for Eastern Europe and other nations to grow their economic wealth, they cannot rely solely on increasing domestic demand, which often results in increased demand for imports.  They must also leverage their work force's skill and cost advantages alongside an innovative culture which can create quaity goods and services which are competitive in the export market.  

There are several examples of innovation in both the Baltics and the Balkans, either in terms of the development of new ecommerce applications in the North and the growth of complex Business Process Offshoring capacity in the South.  We will return to this topic in a subsequent blog.

In the meantime we welcome Len into the team and look forward to working with the new growth enterprises of the future.  Cyprus is a key offshore jurisdiction frequently used to host an intermediate funding vehicle both for efficient tax structures but also a more predictable, UK-law based judicial system.  The domestic market in Cyprus is also encouraging as it emerges from the troubles encountered in its financing industry.  EBRD's newest country of operations is Cyprus.  You can read more about Len's background in our Team and Experience section.       

Wyn River contributes towards enhanced restructuring initiatives in the modified European Insolvency Regulation

On 4 December 2014, the European Commission announced that Justice Ministers had agreed significant changes to the European Insolvency Regulations which have been in place since 2002.

One of the main objectives in the revisions is to promote more use of business rescue and restructuring solutions consistently across all 28 member states, to preserve jobs in potentially viable businesses that until now have often entered slow and inflexible formal liquidation processes.  There are also proposed changes to simplify the insolvency provisions covering both groups and cross-border corporate failure.  

The EU has been developing a framework for changes for around two years, starting with a suggested package of measures proposed in December 2012. In Juy 2013 it launched a public consultation on attitudes towards rescue and the stigma attached to both personal and corporate insolvency.  In October 2013, the representative organisation for insolvency and turnaround specialists, Insol Europe, won a tender to conduct a comparative study into the existing pre-insolvency, restructuring and insolvency processes across all 28 member states.  The report on the findings from that study was published in April 2014 (A New Approach to Business Failure and Insolvency).  Wyn River is pleased to confirm that our local associate, Ieva Strunkiene, contributed the study inputs for Lithuania in the Insol Europe study and Nigel Davies, with close support from Michael Glazer, the head of our local affiliated firm SEE Regional Advisors d.o.o., contributed the inputs for Croatia. The revisions to the European Insolvency Regulations are expected to come into force in May 2017, according to the EU press statement recently released.

For those interesed in this area, the European Bank for Reconstruction and Development has recently published its own analysis into insolvency and restructuring frameworks across many countries of its operations, not just on legislative content, but also on key enabling areas such as insolvency practitioner licencing, remuneration, ethics and case supervision.  You can read the interesting findings of the EBRD study here.

Wyn River's Senior Advisor on Water and Environment joins Bulgaria's Interim Government

Congratulations to Rado Russev who has taken up the post of Deputy Minister of Regional Development in the interim Government for the Republic of Bulgaria.  Rado Russev was previously a senior advisor on Water and Environment with Wyn River's affiliated firm in Bulgaria, New Europe Corporate Advisory.  The interim Government, led by President Plevneliev, has stressed the importance of regional cooperation in the area of energy efficiency and renewable energy sources in his speech this week at  the UN Climate Change Summit in New York.  You can read about the President's speech here.

Wyn River and New Europe Corporate Advisory are cooperating closely on several joint projects including a large organic agribusiness development in Central Bulgaria as well as a joint bid with other consortium members for a Western Balkan Municipal Infrastructure project.

We wish Rado every success in his new position. 

Bulgarian Parliament, Sofia, 2013 (although it looks older!)

The merits of Bulgaria for trade and investment, despite the collapse of a large domestic bank

The online journal "Bulgaria Now" interviewed British Ambassdor Jonathan Allen in late June about why trading with Bulgaria and neighbouring countries makes sense for many international businesses.  A link to that interview and a set of very useful supporting notes can be accessed here.

Within a month of month of Ambassador Allen's interview, the Bulgarian coalition government is on the verge of resignation and there was a run on two large privately owned banks, Corporate Commercial Bank and First Investment Bank.  

The coalition government has been under increased pressure recently due to disageements with the EU over the proposed construction of the South Stream gas pipeline from Russia as well as a poor performance in the European Parliament elections.  A caretaker government led by President Plevneliev is expected to take over later in July ahead of elections scheduled for 5 October.  It is hoped that the interim government will be pro-business and pro-reform and that momentum will continue after the next elections.

Bulgaria has not had a banking crisis since 1997, and is often praised for its conservative fiscal policy, use of a currency board to peg the Lev to the Euro and well capitalised and liquid banking operations, under the supervision of Bulgaria's National Bank.  Confidence in First Investment Bank was restored with an emergency credit line, but investigations are continuing into the operations and future of Corporate Commercial Bank which is currently in the control of the authorities.  While the bank is closed, depositors cannot get access to their funds.  This not only includes individual depositors but also several large cash-generating state owned companies.

"Bulgaria Now" asked Nigel Davies of Wyn River to comment on the recent developments, which he believes do not alter the basic competitive advantages of Bulgaria as a member of the EU with a highy skilled and low cost workforce, at the centre of a large and strategic geography and market in South East Europe.  You can hear Nigel Davies's interview here

Nigel Davies chairs Finance Estonia panel on start up exits and next round funding

Tallinn, Estonia, 2014

Nigel Davies, founder of Wyn River, had the opportunity to lead a panel of investors in Tallinn at the Finance Estonia conference on 17 June 2014.

Attended by over 100 angel investors, venture capitalists and founders, delegates had the priviledge of a presentation from the Estonian President, Ilves Toomas, who covered the benefits and simplicity of e-citizenship offered by Estonia. More on that in due course.

During the start up panel, the themes which emerged included the need for early dialogue between the stakeholders on exit preparation, valuation drivers and expectations, the need for rehearsal and real life presentation time by founders in front of investors, as well as personal connection to funders, because cold calls rarely work. 

Many thanks go to Signe Viimsalu, former CEO of EstBAN, for organising Wyn River's participation in the event. During the week, Wyn River held a series of high value meetings with investors and start-ups whch have helped Estonian businesses to connect to the private equity world in London and international customer markets.

Public Private Partnership financing for Infrastructure and Energy projects in Serbia

On 6 December 2013, UK Trade & Investment Serbia in conjunction with Wyn River Limited, ran a webinar on the future potential for Public Private Partnership financing models for infrastructure and energy projects in Serbia.  Wyn River holds the view that this approach is suitable for several, but not all, projects.  What is the best way to deliver quality services at the best cost to consumers over the life of the project?  It is all about comparing cheap finance for public projects verses more expensive finance for the private sector, but with efficiency gains from procurement and operation over (up to) 25 years. It is a complex contractual and risk sharing area where UK professionals can help to de-mystify key aspects, based on several decades of successful and less successful project experiences both in UK and South East Europe.  The UKTI and Wyn River slides are available on request.

Nigel Davies appointed as an international cooperation partner with prominent German firm, hww weinberg wilhelm.

hww weinberg wilhelm is a prominent German restructuring consultancy and insolvency administration firm.  It has a series of international cooperation partners across the world who work with hww's German insolvency administrators and consultants in a trusted relationship, available on-site whenever needed.

Nigel Davies has been asked to cover several countries across Eastern Europe and Central Asia, namely Albania, Bulgaria, Croatia, Estonia, Georgia, Kazakhstan, Serbia and Turkey, where he can either advise hww's clients on their best options personally or refer them to other Wyn River associates with excellent local knowledge. 

Nigel joined with several other hww international cooperation partners earlier in January in Stellenbosch, South Africa for their annual conference.  This coincides with Wyn River's decision to expand its  target market to include the African continent.

Croatia's new balance sheet correction process and other regional restructuring developments

Croatia joined the European Union as its newest member on 1 July to much fanfare.  Joining the European Union promotes among other things a level playing field in trade and customs, investor protection, social rights and employment mobility.  However, as readers are aware, there is no automatic harmonisation of insolvency and restructuring law or practice country by country and interesting local concepts emerge which can offer some useful data and ideas to neighbours.

Croatia recognised that several companies are now over-indebted, including a number of large companies, and have little or no prospect of repaying all bank loans within a reasonable time frame.  The Croatia National Bank’s Governor, Boris Vujcic, recently presented in London the CNB estimate that Non Performing corporate loans in Croatia may have been be as high as 25% when they enterered the EU.  Other neighbouring countries face similar or even worse scenarios.

This is a common problem across the world and has given rise to the phrase of “zombie” companies.  Zombie companies just about keep going as long as there is no trigger for new money and interest rates remain low, but seem to offer little in the way of growth or realistic remedies for creditors or shareholders alike.  Zombies seem content to stumble on day to day without much direction, hoping for the discovery of a miracle cure.

Continue reading Croatia's new balance sheet correction process and other regional restructuring developments

Bulgarian Associate at Wyn River takes up Government post

We were delighted when Krassin Dimitrov, with excellent sector reform experience and a former investment banker, agreed to join Wyn River as an associate representing Bulgaria at the beginning of 2013.

A close work colleague of fellow Wyn River associate Hugo Green, Krassin has worked not only on several important Bulgarian projects but also on key regional assignments in Serbia, Kosovo, Bosnia and Herzogovina, Montenegro and elsewhere.

In June, Krassin was invited to take up the position of Deputy Minister of Economy and Energy at the Government of the Republic of Bulgaria.  Taking up that position to help drive the reform agenda and encourage growth in his own country means, of course, that he must step down from private sector projects.  All of us at Wyn River wish Krassin and Bulgaria well with the exciting challenges ahead. 

Wyn River team gain three new external positions

Signe Viimsalu has been apponted CEO of the Estonian Business Angel Network which enhances Wyn River's access to start up finance and strengthens the advice we can give to businesses regarding investor and invention protection.  Wyn River is connected to several other Angel Investment Networks across our region.

Nigel Davies has been appointed an Ambassador to the Turnaround Wing of Insol Europe.  The Ambassador role is designed to draw attention to the important debate on restructuring in various countries that can be delivered using both in-court and out-of-court techniques as well as encouraging more practitioners and Chief Restructuring Officers to join the Turnaround Wing.

Nigel has also taken up the role of head of the infrastructure focus group at the British Croatian Business Club, whose objectives include improving the trade and business climate in Croatia as well as providing a central point to increase UK/Croatian business volumes.  The British Croatian Business Club also provides a forum for more connections and partnerships to be formed between the Croatian business diaspora across the world. The Club was formed at the beginning of 2013, a significant year for the country as it is scheduled to join the European Union on 1 July later this summer.

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