Deal 5: Supernova Head of Mergers & Acquisitions Johannes Wurzer on Shopping Mall Portfolio Acquisition in Slovenia

Deal 5: Supernova Head of Mergers & Acquisitions Johannes Wurzer on Shopping Mall Portfolio Acquisition in Slovenia

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On December 29, 2019, CEE Legal Matters reported that Selih & Partnerji had advised Supernova on its EUR 220 million acquisition of seven shopping malls and five smaller shopping centers from Centrice Real Estate. Johannes Wurzer, Head of Mergers & Acquisitions at Supernova, spoke with us about the deal.

CEELM: Tell us a few words about Supernova and the business case behind the acquisition.

Johannes: Supernova is a leading private real estate company with a buy-and-hold investment strategy focused on high-quality retail properties in Central and Eastern European countries with strong macroeconomic fundamentals. We broadly divide our portfolio properties into single-tenant properties and multi-tenant properties.

As a first-mover in the Slovenian market, we followed the Centrice portfolio closely for many years and are now happy to integrate it within Supernova Group.

CEELM: What would you say was the most complex aspect of the deal, from a legal standpoint?

Johannes: Due to Slovenian law specifics on title acquisition, the establishment of securities and the fact that multiple entities – from seller and buyers to previous and new creditors – were involved in the transaction, negotiating an effective and legally secure escrow mechanism was one of the most challenging legal points of the transaction.

It was especially important that the escrow agreement considered the interest of the new creditors (i.e., the financing banks), otherwise securing the financing would not have been possible. At the same time, the mechanism had to assure that the purchase price was placed to the escrow account and released from it in the shortest time possible due to certain specific requirements of the financing on the sale side and also to assure lower transaction costs. Additionally, it is worth noting that several banks separately provided financing for the deal and thus, different banks had to be commercially and legally aligned.

CEELM: How was the legal work split between your in-house lawyers and your external advisors? Is that in line with your usual practice?

Johannes: The role of our in-house lawyers was reduced to a minimum, and we relied on our experienced external advisors to lead us through all the steps in the process, from first drafts to the execution of a deal. This is our usual practice as we do not have in-house lawyers for each of the markets we are engaged in.

CEELM: How was the deal financed?

Johannes: Part of the acquisition price was financed by equity and financing on the holding level while the majority of the funds were secured by financing from different European banks. In most cases, the transaction advisors at Selih & Partnerji did the heavy lifting on the financing side as well, save for two banks, where the financing documents were under Austrian law and we asked the Dorda law firm for assistance. In respect to those two banks, Selih & Partnerji provided assistance with respect to the Slovenian aspects and the Slovenian security documents.

CEELM: What were your main considerations behind choosing Selih & Partners as your advisors on this deal?

Johannes: We have known Selih & Partners and their RE head partner Blaz Ogorevc for many years, and from other deals. We were impressed by their cooperative approach in dealing with the complexity and scope of the transaction. We checked their track record and capacity in similar transactions and decided to engage their services on this deal. We are very satisfied with that decision, and since then we have built a professional relationship with them. We are convinced that engaging Selih & Partnerji contributed to the successful closing of the deal.