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The Buzz in Slovenia: Interview with Mia Kalas of Selih & Partnerji

The Buzz in Slovenia: Interview with Mia Kalas of Selih & Partnerji

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Mia Kalas, Partner at Selih & Partnerji, says that recent conversations with her peers in Slovenia have generally focused on one pleasant topic. “When we meet we mostly discuss how the work load is really increasing, which is good.” Kalas says, “this is the busiest time we’ve had in the past few years. The economy is really growing, and what we’re seeing is quite a lot of M&A transactions in the private sector.” 

According to Kalas, the boom comes from private M&As rather than from a relatively dried-up privatization sector. "What we’ve seen in the past year is slow but very interesting developments from Asian investors.” Kalas points both to the USD 1 billion acquisition of Outfit7 Investments Ltd by a group of Asian investors earlier in the year — the largest ever transaction involving a Slovenian company — and to the more recent acquisition by an Asian-European private equity fund of a Slovenian laser manufacturing company, both of which her firm worked on.

"There are quite a few processes going on,” Kalas says. “The freight part of the Slovenian railways is up for sale, and we see a lot of potential work in the financial industry, which is expecting a lot of M&A.” Kalas refers particularly to the ongoing sales processes of Gorenjska Banka and Dezelna Banka Slovenije, and it is expected that the privatization of the Abanka, which should be finished by summer of 2019, will begin this year. As for the long-awaited construction of a second railway track on the Koper-Divaca line, Kalas reports that "we had a referendum at the end of September that was actually initiated by opponents of the law, and the referendum did not succeed, so the project — which will be the largest infrastructure project in Slovenia in recent decades — is continuing." Similarly, she says, the controversial intention of the Austrian automotive supplier Magna Steyr to build a car painting facility and later on a car production facility in Slovenia — a project that has faced strong opposition by a part of Civil Society and environmental groups — "has managed to obtain a final environmental permit and later on a building permit, so this is a major step toward the investment that should open up a lot of jobs, especially as it’s in an underdeveloped part of Slovenia, so this is a good opportunity to open that part of the country up."

Other sectors are strong as well. "Real estate is doing very well,” Kalas reports. "The prices of private condos are going up,” she says, by way of example, and overall the sector is growing “in such a way that we were starting to wonder if there’s not another bubble coming.” In the meantime, she says, “we see an increased appetite for construction of logistics centers, and we are working on one complex and difficult one.”

In addition, she says, “there’s a lot of new financing going on. Following the crisis, new lending was practically dead, and most of the work was related to restructuring. Now we are seeing a record number of financing deals — including acquisition financing — in the past six months. The banks are starting to resume their traditional function."

The effect of this boom on the bottom line is undeniable. "Our numbers for the first six months show that we are — hopefully — on a record pace in revenues. So things are very busy.” And Selih & Partners is hardly the only firm benefitting from this boom. "The legal market is growing,” Kalas reports, “and all the firms are busy.” 

Perhaps as a result, she reports, the legal market itself is relatively stable, with “really high competition.” Kalas is unconcerned. “As long as that competition is healthy and fair, it’s actually good for everybody, because the standards are going up. The clients are also more and more demanding, which is definitely a trend, both in terms of quality and in terms of how quickly a deal can be done. It’s challenging but it’s also good.” Indeed, she says, clients are starting to realize the value quality law firms can provide. "Right now we’re working for a client who’s engaged in a very difficult and demanding project, and this client usually interacts with us not on a daily basis, but on an hourly basis. Clients are really starting to view us as their trusted advisors, not just as legal counsel. Some clients have very strong internal legal functions, and those who do will only ask us the most complex questions, whereas other clients will ask us to assist them in everything, which requires also skills other than legal.” Kalas says such clients, in particular, "allow us to train our junior lawyers in a very efficient way.”