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Schoenherr, CMS, and Wolf Theiss Advise KAF Offer to HETA Creditors

Austrian Finance Minister Hans Joerg Schelling addresses a news conference in Vienna, Austria, March


Schoenherr is reporting that on Friday, September 2, 2016, the Austrian Finance Minister gave the green light to finance a public offer by Karntner Ausgleichszahlungs-Fonds (KAF) to HETA creditors pursuant to § 2a of the Austrian Financial Market Stability Act. Wolf Theiss advised a number of international creditors, while many banks were advised on Austrian law and internationally by Linklaters.

According to a statement released by Schoenherr, the offer implemented the Memorandum of Understanding (MoU) concluded in May 2016 between the Austrian Minister of Finance and a significant number of creditors of debt instruments issued by HETA Asset Resolution AG (HETA) that are subject to a regional law deficiency guarantee. The offer was published by KAF on Tuesday, September 6, 2016. 

The European Commission cleared the offer under state aid law on September 1, 2016. Prior to the launch of the offer a substantial number of HETA creditors informed the Republic of Austria that they were willing to participate in the offer. This will also result in the termination of the so-called lock up agreements between HETA creditors in order to enable all HETA creditors to accept the offer. The Republic of Austria therefore expects that the offer will be accepted by the statutorily required majorities.

The key commercial terms of the offer were announced in May 2016 with the publication of the MoU and remain unchanged. The Province of Carinthia will contribute an amount of EUR 1.2 billion. The remaining funds will be provided to KAF by the Republic of Austria, thereby pre-financing to a large extent the recovery from the HETA resolution. 

Schoenherr assisted the Republic of Austria via Abbaumanagementgesellschaft des Bundes (ABBAG) in negotiating the MoU. In execution of the MoU, Schoenherr also supported in implementing the complex transaction and in preparing the substantial tender offer documentation. The Schoenherr team was led by Partners Sascha Hodl, Ursula Rath, and Wolfgang Holler, assisted by Counsel Stefan Paulmayer, Attorney Miriam Simsa, and Partner Thomas Kulnigg. The core team was also supported by Partner Martin Ebner. The Republic of Austria as guarantor of the zero coupon bond of KAF was advised by the Frankfurt office of Linklaters LLP. 

The banks were advised as to Austrian law by a CMS team led by Partner Martin Zuffer and consisting of Partners Daniela Karollus-Bruner, Sibylle Novak, and Robert Keisler, and Attorneys Philipp Mark and Thomas Bohm, and internationally by a Linklaters team lead by Partner Peter Waltz. 

The Wolf Theiss team advising a large number of international creditors, including, inter alia, the German Pfandbriefbank AG and the North German Landesbank, was led by Partner Claus Schneider and Consultant Christine Siegl.

The Province of Carinthia was advised by a Skadden, Arps, Slate, Meagher & Flom team lead by Partner Stephan Hutter and as to Austrian law by Attorney Norbert Abel and the Hausmaninger Kletter Law Firm.

Image source: Reuters

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Established in 1957, Wolf Theiss is one of the leading European law firms in Central, Eastern and South-Eastern Europe with a focus on international business law. With 300 lawyers in 13 offices located in Albania, Austria, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Hungary, Poland, Romania, Serbia, Slovakia, Slovenia and Ukraine, Wolf Theiss represents local and international industrial, trade and service companies, as well as banks and insurance companies. Combining law and business, Wolf Theiss develops comprehensive and constructive solutions on the basis of legal, fiscal and business know-how.

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