Panama, December 23, 2020. Morgan & Morgan advised Farmalisto, a health technology platform with presence in Mexico, Colombia, and Peru, with respect to the equity investment made by HBM Healthcare Investments (Cayman) Ltd., Inter-American Investment Corporation, Morgan Rio Capital Management, and other minority investors for the amount of up to US$18,000,000.00 in Farmalisto.
The proceeds of the investment will be used to strengthen its innovation processes, open new markets in the region and accelerate its expansion in the places where it currently operates.
Since the company has operations in various countries, there was a complex coordination with different legal teams and company´s executives to complete all the conditions precedent to close the transaction on time.
Partner Roberto Vidal represented Morgan & Morgan in this transaction.
Morgan & Morgan advised Continental Grain Company in an investment in Multifoods to support the company´s expansion plans
Panama, November 13, 2020. Morgan & Morgan advised Continental Grain Company (“CGC”) in an investment in Multifoods (“Multifoods” or the “Company”), a leading Peru-based contract-manufacturing firm engaged in the production of food and beverage products, working with both grocery retailers and CPG companies.
Morgan & Morgan advised CGC in all Panama law aspects of the transaction, based on the corporate structure of the Company. CGC is a privately-owned global investor, owner, and operator of companies with more than 200 years of history across the food and agribusiness spectrum. The US firm creates long-term value by applying deep industry knowledge, capital and talent to businesses ranging from established market leaders to promising innovators.
Partner Roberto Vidal represented Morgan & Morgan in this transaction.
Panama, October 2, 2020. Once again, Morgan & Morgan receives top rankings in the recently released Chambers & Partners Latin America Guide 2021, a key reference point of Latin American top law firms.
Morgan & Morgan has been recommended in several practices due to the firm´s excellent performance and prominent work in each one of these areas.
Likewise, the directory classifies within the top Bands the following attorneys of the firm:
- Inocencio Galindo: Banking and Finance / Projects and Energy / Corporate and M&A.
- Francisco Arias G.: Banking and Finance / Capital Markets / Corporate and M&A.
- Ramon Varela: Banking and Finance, Projects and Energy.
- Roberto Vidal: Corporate and M&A.
- Kharla Aizpurua Olmos: Banking and Finance.
- Ricardo Arias: Capital Markets.
- Ana Carolina Castillo Solis: Projects and Energy.
- Allen Candanedo: Intellectual Property.
- Maria Eugenia Brenes: Intellectual Property.
- Simon Tejeira Q.: Dispute Resolution.
- Jose Carrizo: Dispute Resolution.
- Luis Vallarino: Dispute Resolution.
- Jazmina Rovi: Shipping.
- Juan David Morgan Jr.: Shipping (Litigation).
- Francisco Linares: Shipping (Litigation).
Congratulations to all of them, and thanks to our clients for trusting us as their legal advisors in Panama.
Morgan & Morgan advised Panasolar Generation, S.A. in an issuance of corporate green bonds for US$15,500,000.00.
Panama, September 29, 2020. The green bonds are certified under the Climate Bonds Certification Scheme run by the Climate Bonds Initiative, an international, investor-focused non-profit organization, and the only organization working solely on mobilizing the $100 trillion bond market for climate change solutions.
The Climate Bonds Standard and Certification Scheme is a labelling scheme for bonds, loans & other debt instruments. Rigorous scientific criteria ensure that it is consistent with the goals of the Paris Climate Agreement to limit global warming to under 2 degrees. The scheme is used globally by bond issuers, governments, investors, and financial markets to prioritize investments that genuinely contribute to addressing climate change. This certification is the main international award recognizing the best practices in green finance, covering green bonds, loans and significant market developments in climate and transition investments.
The green bonds also have a verification by Pacific Corporate Sustainability (PCS) of the Pacific Credit Ratings group.
The green bonds have been registered with the Superintendency of Capital Markets of Panama and will be listed on the Panama Stock Exchange. MMG Bank acted as arranger and is engaged as bookrunner and paying agent of the green bonds.
Partners Roberto Vidal, Kharla Aizpurua Olmos and Ricardo Arias, and associate Cristina De Roux participated in this transaction.
Morgan & Morgan advised in a US$40 million bond issuance by Banco Latinoamericano de Comercio Exterior (Bladex)
Panama, September 14, 2020. Morgan & Morgan advised BofA Securities, Inc., Mizuho Securities USA LLC., and SMBC Nikko Securities America Inc., in an issuance by Banco Latinoamericano de Comercio Exterior (Bladex) of five-year term bonds for US$400,000,000.00 with a fixed coupon of 2.375%, under Rule 144A and Regulation S of the United States Securities Act of 1933.
Partners Francisco Arias G. and Roberto Vidal, and international associate Miguel Arias M. represented Morgan & Morgan in this transaction.
Morgan & Morgan advised Gaming & Services de Panama, S.A. and Cirsa Enterprises Group, in connection with a revolving credit facility and a term loan facility
Panama, July 9, 2020.
Morgan & Morgan advised Gaming & Services de Panama, S.A. (the “Company”) and Cirsa Enterprises Group (“Cirsa”), a leading gaming group in Spain, Italy and a number of countries in Latin America, with respect to (i) a revolving credit facility agreement up to the amount of €55,000,000, by and among Cirsa Enterprises S.L.U., Cirsa Finance International S.à r.l. and the Company (as guarantor) with Deutsche Bank AG, London Branch and Barclays Bank Plc.; and (ii) a term loan facility agreement up to the amount of €20,000,000 by and among Cirsa Enterprises S.L.U., Cirsa Finance International S.à r.l., the Company (as guarantor) and Sculptor Capital Mnagement, as fund manager.
Partner Roberto Vidal represented Morgan & Morgan in this transaction.
Morgan & Morgan advised Parque Industrial y Corporativo Sur, S.A. in connection with the public offering of revolving corporate bonds for an amount of up to US$100 million
Panama, April 24, 2020.
Morgan & Morgan advised Parque Industrial y Corporativo Sur, SA, in relation to the public offering of revolving corporate bonds (hereinafter the “Bonds”), which will be issued in multiple series, which may be senior series or subordinated series under a revolving program in which the outstanding principal balance of the Bonds issued and owed, in a single moment, may not exceed One Hundred million Dollars (US $100,000,000.00), legal tender of the United States of America. The series A of the Bonds may be guaranteed with a guarantee trust that has the usual assets for this type of transaction, such as monies, assigned rights, mortgages, among others.
Parque Industrial y Corporativo Sur, S.A. is a 42-hectare multipurpose project with high-quality, first-world infrastructure and buildings that serve as a storage and logistics center.
Panama, April 13, 2020.
Morgan & Morgan advised Alpha Credit ©, a leading technology firm that provides financial services to segments underserved by traditional banking institutions, specialized in consumer lending and financing for small and medium enterprises (SMEs), in the process to complete an equity financing round for more than MXN$2.4 billion (approximately US$100 million), led by SoftBank´s Latin America fund, one of the leading technology investors in the region.
Partners Francisco Arias and Roberto Vidal participated in this transaction.
Morgan & Morgan advised the shareholders of Unity Group in a corporate restructuring and subsequent sale of its business to Willis Europe B.V.
Panama, March 12, 2020. Morgan & Morgan advised the shareholders of Unity Group, a holding company with subsidiaries engaged in insurance brokerage in Central America with operations in six countries (Panama, Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua), in a corporate restructuring and subsequent sale of its business to Willis Europe B.V., a company incorporated under the laws of the Netherlands and a subsidiary of Willis Towers Watson (NASDAQ: WLTW), a leading global brokerage and consulting firm. The transaction will increase the reach and scale of Willis Towers Watson in the Latin American region, both for its Corporate Risk and Brokerage (CRB) and the Human Capital and Benefits (HCB) segments.
This was a cross border transaction involving United States of America, British Virgin Islands, The Bahamas, Panama, Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.
Regulatory framework for foreign investment
The Panamanian Constitution reserves “retail activities” for Panamanian nationals. Various statutes have limited the application of the prohibition to activities that involve the sale of goods to consumers.
By statute, the private sector (national or foreign) may not participate in water and sewage services; in other words, these services are reserved to the State. Likewise, electricity transmission services (as distinguished from generation and distribution) is also by statute reserved to the State.
Certain activities in Panama are reserved totally or partially for Panamanian nationals, based on constitutional provisions and regulated by statute. For example, commercial fishing in national waters is reserved for Panamanian nationals. Similarly, broadcast radio and television is reserved for Panamanians, but foreign persons may own up to 35% of corporations holding concessions for those activities.
Another type of restriction in Panamanian statutes prohibits foreign governments from owning land and participating in certain industries. For example, foreign corporates and entities controlled by foreign governments may not hold a majority stake in public service of telecommunications corporations. Similar restrictions are found in mining.
Foreign persons may not own real estate within 10 kilometers of the border with other countries.
Exchange control or currency regulations
The monetary unit in Panama is the Balboa. However, the U.S. Dollar (US$) is the legal tender of Panama and the same nominal value as the Balboa. There are no capital controls or foreign currency controls in Panama. Forced currency is prohibited in Panama’s Constitution and the parties may enter into obligations and establish payments in the currency they freely agree upon.
Grants or incentives
Investments (national or foreign) may qualify for incentives provided they are made in certain areas designated by law.
Individual employment contracts / Termination regulation
- Termination of employment contracts is regulated by the Labor Code, which grants special protection to employees.
- There is a process that can be followed before the Ministry of Labor to reduce personnel based on “economic grounds”, but companies normally carry out reductions without pursuing that process.
Capital gains in the sale of shares are taxed at 10%. The buyer must withhold 5% of the price paid and the seller may accept the amount so withheld as its definitive tax or file a return to obtain a credit for the difference between the amount withheld and the taxed caused by the gain realized in the transaction. In an asset transaction, the tax treatment will depend on the asset being transferred. For example, real estate is levied with two taxes: transfer tax (2%) and capital gains tax (10%). The buyer must withhold 3% of the purchase price, leaving the seller to accept the amount so withheld as its definitive capital gains tax or file a return to obtain a credit for the difference between the amount withheld and the capital gains taxed caused by the gain realized in the transaction. There are stamp taxes that may apply to the documentation granted. The issuance of shares does not cause any taxes.
Antitrust jurisdiction triggering events/thresholds
Corporate concentrations that affect competition will be subject to antitrust review. The threshold at which concentration may affect competition is 25%. Parties to a transaction that affects competition may submit a petition to the antitrust authority to review and approve, which approval may be granted without or with conditions. A concentration that is approved by the antitrust authority may not be reviewed by the authority or subject to judicial review. Without such approval, within three (3) years after perfected both the authority or a court (upon petition by a third party) may review the transaction and impose sanctions (including divestment) if found detrimental for competition.
Signing/closing meeting documents
Closings are ordinarily carried out through the delivery of documents set forth in definitive agreements, including share certificates duly endorsed in the case of share transactions. Payment is usually made through wire transfers.
In the case of asset deals, special documentation, formalities and filings depend on the type of asset. For example, real estate is only transferable through a public deed (“escritura pública”) granted before a notary public, which deed must then be submitted for registration and actually registered in the Panama Public Registry Office.
Gap requirements between signing and closing
In the case of share transactions, there are no such gaps required by law, except for tender offers of publicly traded shares. In the case of asset transactions involving real estate, for example, such gaps arise because registration of the public deed takes at least 24 hours.
Proof of identity and authority to sign
Corporate resolutions in the case of legal entities, accompanied by a good standing certificate of the jurisdiction of incorporation, and passport or other identification document for the person signing. All documents granted or executed outside Panama must be authenticated by a Panamanian Consul or through the Apostille (Hague Convention (1961) on legalization of document).
- Simple contracts are executed by written signature. Public deeds are granted by a Notary Public upon personal appearance and execution by signatories before the Notary Public.
- In the case of simple contracts, written signature by the persons signing on behalf of corporate parties thereof will suffice – ie, the parties validate whether the persons are duly authorized to enter into an agreement on behalf of the corporate party.
- Individuals with legal capacity may enter into contracts and grant deeds by written signature.
- In the case of foreign companies, it is customary to require powers of attorney duly legalized by a Panamanian Consul or through the Apostille.
Notary impact on transaction timetable
Authentication of signatures by notaries is viable and may be obtained during the execution ceremony, provided that signatories are physically present at such ceremony. Post execution authentication is viable, provided the signatory is in Panama and customary identification documents (eg, passport) is produced to the notary.
Changing of stockholders, officers and directors
Changes of stockholders in the books of the corporation may be regulated in its articles of incorporation and/or by-laws. In the absence of such regulation, it is usually accomplished through the Secretary of the corporation, who customarily requires the share certificate and its endorsement in order to make annotations in the share register.
Changes of directors and officers requires corporate resolutions to be submitted to a Notary Public for issuance of a public deed, which deed must then be filed and registered with the Panama Public Registry Office.
Private limited company
Transfer of title of shares is usually accomplished through the Secretary of the corporation, who customarily requires the share certificate and its endorsement.
Execute document in counterpart
It is customary to avoid counterparts in order to minimize stamp taxes, which are caused and payable with respect to each counterpart. Signature pages of contracts may be executed in different jurisdictions to be consolidated in a single counterpart, with each signature being authenticated in compliance with the law in the jurisdiction of execution, including legalization by “apostille”.
Strictly enforced undertakings
Strict enforcement of undertakings will be available soon, upon signing and promulgation (ie, publication in the Official Gazette) of recently adopted legislation that reinstated provisions of the Judicial Code that were repealed a few years ago.
Damages are available.
Required due executions legal opinions
None required by statute, but in cross border transactions (particularly for indebtedness) it is customary for legal opinions (debtor’s and creditors’ counsel) to be issued.