On August 23, 2022, CEE Legal Matters reported that JSK had advised Credit Value Investments on its investment in the Saunia Group through bond financing. CEE In-House Matters spoke with Radoslav Tausinger, Managing Director at Credit Value Investments (CVI), to learn more about the matter.
CEEIHM: To start, please tell us a bit about CVI and its operations in the region.
Tausinger: CVI is an independent asset manager focusing on Central and Eastern Europe, managing ten investment funds in private debt strategies, with total assets under management of below EUR 1 billion. While we have done a few minority equity investments, our key focus since our inception in 2012 has been on private debt. We have completed nearly 700 private debt investments, having invested almost EUR 2.7 billion in private debt in Poland and eight other countries in the region almost exclusively within the European Union. Funds managed by CVI invest in companies from a broad range of industries, including manufacturing, trade and services, technology, financial services, consumer, as well as real estate. We generally invest in companies that have a proven cash-flow generation model, which makes most start-ups/early-stage companies excluded. However, we have been supporting new projects in selected well-established industries, such as real estate or renewable energy.
CEEIHM: As reported by CEELM, CVI invested in the Saunia Group through bond financing. How does this type of private debt work and how common would you say it is in CEE?
Tausinger: Funds managed by CVI provide companies with a full spectrum of debt solutions including senior, junior, unitranche, as well as mezzanine, with typical tickets ranging from EUR 2 to 15 million. In a typical situation, a company issues a series of bonds that are then purchased in full by funds managed by CVI. This way the company receives all the proceeds from the sale of bonds and can use them for pre-agreed purposes, which typically include some form of growth or refinancing of other business obligations. The bonds would typically have a maturity of 3-5 years but we have also done shorter or longer. The main benefit for companies and their shareholders is that they are not selling parts of their businesses, and keep full control over the business, which is not the case for example in private equity investments. Private debt has been growing in the region but it is still behind Western European levels, so we have still a lot of ground to cover.
CEEIHM: What was it about Saunia Group that made you trust the investment?
Tausinger: Operating sauna worlds is a somewhat unique and very interesting concept. It is fully in line with the trends for a healthier lifestyle while the group is also making access to sauna worlds as convenient as possible. At least equally as important, Saunia Group is backed by a strong team of entrepreneurs who have built other successful businesses together before. Having such experience helps to a significant extent with every new venture. The group keeps finding new and unique locations such as most recently in Karlovy Vary.
CEEIHM: What were the most complex aspects of the deal from a legal perspective?
Tausinger: This is probably a question for JSK. One thing that comes to mind is that the group operates in two countries – besides its home market of the Czech Republic it also has a branch in Slovakia, and as result, there was a need for coordination of some Slovak aspects of the transaction as well. We also did the transaction in a swift manner, thus it required some quick reaction times.
CEEIHM: And why did you pick JSK as your advisor on the matter?
Tausinger: We have done two transactions with JSK as our legal advisor in quick succession. We wanted to work with them as their Partner Tomas Dolezil has a very good reputation in the private capital industry in the Czech Republic. When we approached them, they were very responsive and ready to start working on short notice (as transactions are quite often on short notice). The cooperation went very well as they utilized their private market experience, and we hope to be able to work together on other transactions in the future.
Originally reported by CEE In-House Matters.
