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published NOVEMBER 02, 2009

Baker & McKenzie Advises EBRD and KfW Bankengruppe on Their Equity Investment into Megabank

Baker & McKenzie acted as English and Ukrainian law counsel with respect to the investment by KfW and EBRD into the equity of Public Joint Stock Company "MEGABANK" ("Megabank"), as contemplated by the capitalization program of Megabank, which was adopted pursuant to the requirements of the National Bank of Ukraine. The legal work included, in particular, transaction structuring, full legal support and advice to the clients on all issues related to the acquisition of substantial shareholdings in Megabank, the preparation and negotiation of the transaction documents and their execution by the parties, and the successful closing of the transaction. The transaction documentation covered the specifics of the equity investment process under the applicable Ukrainian legislation, including those related to the prevention of the negative effects of the financial crisis, and, at the same time, was prepared in strict compliance with the requirements, standards, and guidelines of such international financial institutions as KfW and EBRD. KfW is an institution of the State Bank of Germany, known in Ukraine as a result of its participation in several major financing projects, and also as the co-founder of the German-Ukrainian Fund together with the National Bank of Ukraine and the Ministry of Finance of Ukraine. Public Joint Stock Company "Megabank" is a Ukrainian bank, considered to be a "mid-size" bank under the classification of the National Bank of Ukraine, with a widespread network of its structural divisions in all of the regions of Ukraine. The Baker & McKenzie team was led by Partners Gordon Low in London and Ihor Olekhov in Kyiv, with key input from Associates Ganna Pushkarova and Anna Voropayeva in Kyiv, and Philip Monahan and Neil Ghosh in London. Commenting on the news, Ihor Olekhov said: "In these difficult times for the Ukrainian financial sector and the Ukrainian economy as whole, this transaction is a landmark showing that the Ukrainian banking sector is still worthwhile for investors, notwithstanding the gloomy scenarios often portrayed in the media about Ukrainian banks and Ukraine's economy."