CMS advised PFR in the acquisition of shares in a water supply company in Tarnobrzeg

CMS advised in a transaction involving the acquisitionof shares in Tarnobrzeskie Wodociągi sp. z o.o. by the Local Government Investment Fund, operating under the auspices of the Polish Development Fund from Tarnobrzeg. 

The investment agreement provides for the possibility of the Local Government Investment Fund acquiring 45% of the shares in Tarnobrzeskie Wodociągi sp. z o.o. The monies obtained in this way are to be earmarked for further municipal investments. 

The Local Government Investment Fund operates under the auspices of the Polish Development Fund to support local government investments. The Fund is a capital investor in municipal companies, in particular those which carry out public utility tasks, as well as local government tasks in maintaining and developing water and sewage infrastructure, transport infrastructure (roads, streets, bridges), and social infrastructure, as well as waste management, public transport, heating and healthcare. 

“This is the second water and sewage sector transaction already this month which we had the pleasure to be involved in. The sale of some shares in municipal companies allows municipalities to obtain additional funds to carry out investments, and at the same time makes it possible to retain control over the company’s activity. This control will return to the city on specific conditions and within an agreed time frame. It is therefore a very beneficial solution, given the limited budgets which the local governments now have”, says Marcin Bejm, partner heading the Infrastructure & Projects team at CMS. 

The scope of work of the CMS Infrastructure & Projects team covers comprehensive advice in the acquisition of blocks of shares in the water supply company: from carrying out a legal due diligence, negotiating the investment agreement and the share sale agreement, to preparing the rules for a buy-back of the shares by Tarnobrzeskie Wodociągi from the Local Government Investment Fund.

The CMS team which advised on the transaction was headed by Marcin Bejm, and supported by Mikołaj Markiewicz, senior associate, and Piotr Gałązka, associate, from the Warsaw Infrastructure & Projects team.