Representing the interests of minority shareholders of JSC Solikamskbumprom and family members of the company’s owner and CEO

JSC Solikamskbumprom is one of the largest Russian enterprises in the timber processing industry, with a complete cycle of timber harvesting and deep wood processing. It accounts for approximately 30% of the country's production of newsprint and interliner (packaging paper used for manufacturing multi-layer corrugated cardboard) and is included in the list of systemically important organisations in the Russian Federation.

Despite its scale, the enterprise was primarily owned by members of a single family. 

Task

The shares and stakes in the companies owned by our clients were previously acquired through inheritance. Our tasks included protecting the interests of minority investors (individuals) when the transactions that entailed exiting the enterprise's ownership structure were being planned and carried out.

Complication

The complexity of the project lay in, among other things, the fact that our clients' ownership was both direct and indirect (through other companies). Planning the transactions and the specific method of a potential exit from the ownership structure required thorough analysis and planning. At the same time, it was necessary to consider:
Various regulatory aspects,
A number of restrictions and obstacles stipulated in the company’s charters,
The requirements of the buyer and the positions of the companies, co-owners, and management that were involved.

Actions taken

Having undertaken a comprehensive analysis of the situation and circumstances, we prepared transaction documentation for the sale of shares in the main company, JSC Solikamskbumprom. The chosen exit strategy was through another company that held shares in JSC Solikamskbumprom, specifically by exiting the LLC through disposing of the stake to the company itself.

Before selecting specific options, we meticulously analysed the steps and their potential consequences. Our work involved negotiating with the other parties involved, advising the client, and taking all necessary actions to finalise the transactions.

Result

All transactions have been completed, the necessary actions having been carried out with our assistance. A number of corporate procedures, owing to the applicable deadlines, are to be implemented in several months' time.

Significance

The success of this project, as well as others for private clients, demonstrates the firm's broad capabilities: our expertise can be applied not only in business projects for major corporate clients but also in tasks unrelated to business, which essentially represent personal, family matters for our clients.

In such projects, we handle a wide range of issues that have to be addressed simultaneously. Pepeliaev Group acts as a multi-disciplinary provider of services that include:

• assessing the tax implications of a transaction for the seller personally;
• preparing and checking transactional documentation;
• liaising with a bank, depository, and registrar;
• matters of confidentiality and the transaction price;
• discussing all strategic and tactical tasks not directly related to legal aspects (e.g. selling now or later), etc.

The success of such projects demonstrates the depth and versatility of our team's expertise, as well as the demand among private clients for a firm capable of providing the full range of services.

Team

The project team is led by Pepeliaev Group Partner Ilya Bolotnov. Lawyers from the Corporate Practice, Counsel Evgeny Mushta and Senior Associate Ksenia Izyuryeva, work under his supervision.