Wyn River Ltd

Michael Glazer is the Director of SEE Regional Advisors, one of Wyn River's associated firms in South East Europe.  Here he takes a look at Croatia's investment grade rating and provides a more detailed assessment of the potential impact of the Agrokor workout on the Croatian economy.  For more background on Agrokor's problems, with 60,000 staff and debts of US$ 6 billion used to fund aggressive expansion, read here.

Here is Michael's view and a link to his earlier Agrokor article:

"Fitch’s confirmation of Croatia’s sovereign Long-Term Foreign- and Local-Currency Issuer Default Ratings at BB/Stable is welcome even though expected. And despite Fitch’s Stable outlook, an upgrade could be in the cards relatively soon. As Croatian Minister of the Economy Dalić noted in connection with Fitch's announcement, Croatia is getting its deficit and public debt under control and the country's economy seems increasingly sturdy (https://lnkd.in/gkz3KRC; Croatian-language only). The biggest threat to Croatia's rating is a misstep in the Agrokor workout. For our take on the effect of Agrokor's woes on the Croatian construction sector, see our EECFA blogpost"

Wyn River founder Nigel Davies has won a competitive bid from the African Development Bank to act as a consultant to their newly formed Special Operations Unit. The Special Operations Unit manages non-performing loans and equity investments across the AfDB's Non-Sovereign portfolio, which is mostly in the private sector.  

Nigel has relocated to AfDB's head office in Abidjan, Ivory Coast, from where he will support the Bank's restructuring and recovery efforts across the continent.  Africa offers significant growth investment opportunities but is currently exposed to a downturn in both commodity/natural resource prices and associated local currency devaluations. 

While the AfDB portfolio will require Nigel's full attention, the rest of Wyn River's associates and network resources remain available in advisory and interim executive roles to address the corporate finance, project finance and restructuring needs of our clients.

Richard Mort is a UK-based Wyn River associate specialising in municipal utility Public Private Partnerships and sustainable energy projects. Richard was part of the in-house finance team for SHARC, an innovative heat exchange technology company, which has recently secured €2 million of equity funding from the Green Investment Bank, to fund a series of investments in Scotland. The pilot project will see heat extracted from waste water intercepted from Scottish Water’s Galashiels network. The heat will then be sold under a 20-year purchase agreement resulting in energy and cost savings and a reduction in carbon emissions. 

Several of Wyn River’s associates and affiliated firms are engaged in innovative sustainable energy project finance. We combine our access to risk capital and debt with a deep understanding of energy and utility Public Private Partnership funding and operations.  Our geographic presence in Eastern Europe, Central Asia and Africa enables to identify and realise both niche and mainstream innovation opportunities for our clients.

Len Judes is Wyn River's associate for both Cyprus and Israel.  Here he writes about the London launch of the Israel Lithuania Technology Hub, of which he is a director. 

On 13th of March, the Lithuanian Embassy in London hosted the first UK seminar of the Israel Lithuania Technology Hub in front of a diverse audience of technology and life science businessmen, members of the Lithuanian expat business community, professional service providers, law firms, tax specialists, and corporate and M&A practitioners.

The Israel Lithuania Technology Hub (ILTH) is a platform launched by the Israel Lithuania Chamber of Commerce and Industry (ILCCI), a non-profit association. The prime purpose of the Hub is to promote economic growth and technological innovation in both Israel and Lithuania by creating a strong partnership between the two countries.

Israel is a phenomenal source of innovation with more start-ups per capita than anywhere else in the world.

Lithuania has an excellent wealth of talent and skilled labour which is cost effective, an interesting geopolitical position bridging Eastern and Western Europe, an understanding of cultures and access to Russia, the CIS markets and of course EU membership, as well as complementary strengths in technology emerging out of excellent academic institutions.

The UK as a whole, and the City of London in particular, are ideal global financial centres, with strong ties to both Lithuania and Israel. The professional legal, accounting and corporate standards of practice are high and are in fact the accepted international standard. England and Wales law and jurisdiction is often applied as governing in such cross border transactions. In light of the above, we have decided to develop the “British dimension” of the Hub activity and intend to run a series of seminars in future months to match UK funding to Israeli and Lithuanian innovation opportunities.

Len Judes and Ronen Gruber, directors of the Israel Lithuania Technology Hub, with seminar delegates at the Lithuanian Embassy in London

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.       

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.

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!)

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.

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.

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.