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CMS advises PFR on purchase of shares in a water supply company in Opole

6 December 2019

CMS advised on the acquisition of shares in Wodociągi i Kanalizacja w Opolu sp. z o.o. (WiK) by the Local Government Investment Fund (Fundusz Inwestycji Samorządowych), managed by the Polish Development Fund (PFR).

As part of the transaction, the Local Government Investment Fund will acquire  from the City of Opole a 25% stake in the water utility company  for the purchase price of approximately  PLN 100 million. The city intends to reinvest the amount of the purchase price into its new investment projects.

The aim of the Local Government Investment Fund, is to support local government in relation to their investments. The Fund injects its capital into municipal companies, active  in water waste management, public transport, heating and healthcare sectors.

"We all see that both local government budget revenues and the scale of EU investments are decreasing and local governments are increasingly looking for additional sources of financing. Obtaining financial support from the PFR or a decision to implement projects in the PPP formula, where investment costs are shared by municipalities with a private partner, make it possible to maintain the current pace of public investments,” emphasizes Marcin Bejm, partner heading the infrastructure and project finance team at CMS.

CMS’s role of legal advisor to the Local Government Investment Fund in this project included a legal due diligence of the company, negotiating the investment agreement, the share sale agreement and the terms and conditions for the redemption of shares owned by the Local Government Investment Fund.

Comprehensive legal advice was provided by a CMS team headed by Marcin Bejm, supported by Mikołaj Markiewicz,  Magdalena Kahan, Piotr Gałązka, and Patrycja Styczyńska from the Warsaw infrastructure and project finance team and Karol Jaworecki from the environmental law practice.