Hogan Lovells Advises Leading Russian Industrial Group Sinara on Joint Venture with Siemens
28 May 2010
Hogan Lovells has advised Russian industrial group CJSC Sinara Group ("Sinara") on establishing a joint venture with Siemens AG ("Siemens").
The joint venture will comprise design, manufacture, operation and maintenance of innovative electric locomotives to enable the Russian market to supply the largest Russian state-owned railway company Russian Railways (RZD).
The multi-million euro transaction was signed on 16 May and is subject to a number of conditions. These include provision of debt financing for the acquisition of existing plant facilities, anti-monopoly approval for this acquisition as well as the signing of a locomotives supply agreement with RZD. Sinara will contribute production facilities in the Urals region with Siemens investing significant monetary funds and the latest technologies. During the initial phase Siemens will supply certain components, while at a later stage the manufacture process will move to Russia.
As part of the transaction the new joint venture has signed a contract with RZD for a supply of 221 electric locomotives in the period of 2011 - 2016. This contract was awarded at the international rail business forum “1520 Strategic Partnership” in June 2010 in Sochi on Russia’s black sea coast.
Hogan Lovells have assisted the client from the outset including establishing a holding company, preparing the joint venture agreement, and working on various ancillary agreements. The signing was a result of year long negotiations which included discussions with both German and Russian governments.
The Hogan Lovells team was led by Oxana Balayan (Partner, Moscow) assisted by Maria Baeva (Counsel, Moscow) and Konstantin Kontievskiy (Associate, Moscow) with support from Joost Broekhuis (Senior Associate, Amsterdam) in relation to Dutch law issues.
Oxana Balayan comments:
"We have had a pleasure to advise a new client CJSC Sinara Group on this transaction as well as to introduce our strong M&A capabilities to Dmitriy Pumpyanskiy, a leading Russian businessman. Our integrated team of lawyers and solid Russia related experience in corporate transactions combined with our client's professional approach helped us to achieve this excellent result which is of strategic importance for Russian railway industry. We look forward to working with Sinara and Dmitriy Pumpyanskiy again in the future."
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