The law firms DZP and Jedwabny & Brzozowska Legal have advised on the biggest infrastructure transaction carried out to date under the "Package for medium-sized cities” programme by the Polish Development Fund (PDF). The transaction involved the purchase by the Local Authority Investment Fund (belonging to the PDF) of a minority shareholding in the company Sądeckie Wodociągi from five of this company's shareholders.

DZP advised Sądeckie Wodociągi and five of the company's shareholders (municipalities: Nowy Sącz, Stary Sącz, Nawojowa, Kamionka Wielka and Korzenna), while Jedwabny & Brzozowska Legal advised the Local Authority Investment Fund belonging to the PDF.

The PDF has invested in Sądeckie Wodociągi by acquiring a minority shareholding in the company. The local authorities intend to allocate the proceeds for strategic investments for their inhabitants. The PDF's investment has a maximum investment horizon of twenty years.

As part of its advice DZP handled the formal side of the transaction and prepared and coordinated the procedure for selecting a share purchaser accepted by the municipal councils. DZP then drafted and negotiated with the PDF the entire transaction documentation, i.e. investment agreement, share purchase agreement and amendments to the company's articles of association due to arrangements made during the negotiations.

"It was thanks to, among other things, DZP's involvement and experience that transaction documentation of several hundred pages negotiated among the company, five municipalities and the PDF was agreed upon at an extraordinary pace, ca. two months.” said Tomasz Darowski, Partner in DZP, who led the team's work.

DZP's Infrastructure & Energy Practice lawyers who worked on the transaction were Tomasz Darowski (Partner) and Michał Przychoda (Associate), supported by local authority, EU and banking law experts Magdalena Zabłocka (Senior Associate), Aneta Włoszek (Associate) and Paulina Armada-Rudnik (Associate).

Jedwabny & Brzozowska Legal negotiated and partially prepared the transaction documentation and also carried out a due diligence of the company.

The team was led by Dr Tomasz Jedwabny, Partner in Jedwabny & Brzozowska Legal, in cooperation with a team of lawyers headed by Dr Dominik Lubasz, Partner in Lubasz i Wspólnicy.

"In this transaction a key factor was good, efficient cooperation among all the parties involved. It was due to this that we managed in such a short time to find a compromise between the requirements of the financial investor and the expectations of the local authorities and the company. I am happy that we could bring our knowledge and experience to bear in such an important project for the local authority sector." said Dr Tomasz Jedwabny from Jedwabny & Brzozowska Legal.

The PDF is Partner of the Ministry of Development in implementing the "Package for medium-sized cities” programme. The PDF's role is to hold consultations with local authorities on the possibility of financing their investment requirements. Applications were filed with the PDF by a  hundred and fifty local authorities seeking opportunities to carry out investments, having limited means, and for various reasons not wishing or being unable to borrow. The greatest investment needs were reported in the area of road transport infrastructure (i.e. roads, streets, bypasses, junctions, bridges, stations, railway lines, rolling stock, hubs) and in the large-capacity area (museums, knowledge centres, schools, pre-schools) of a total value of over PLN 5.5 billion.