The potential EU ban on Russian oil and gas, the Penta Investments split, and the new construction law in Slovakia are currently the major debate, the biggest transaction, and the greatest legal update, respectively, according to Taylor Wessing Partner Jan Lazur.
The biggest debate in Slovakia at the moment, according to Lazur, concerns the planned EU ban on Russia’s oil and gas. “Because of its heavy dependency on oil and gas, with most of the stuff coming from Russia,” he says, “any drastic measure by the EU will have a massive impact in Slovakia.” Most discussions, Lazur notes, focus on two key issues:
One – whether Slovakia will try to pay for Russian resources in rubles. He says that Poland “refused to do just that, with their supplies now being shut off. By contrast, Slovakia is completely dependent on Russian gas, and Minister of Economy Richard Sulik announced the country was willing to pay in rubles.” Otherwise, Lazur says, “we could be facing a risk of gas supply stoppage.”
Two – what exceptions could be made for Slovakia, within the broader EU ban? Lazur says the ban is “obviously a big issue throughout the EU. But if the EU bans Russian oil and gas, it seems that there could be certain exceptions made for Slovakia, Hungary, or other countries in a similar position. It also seems that there could be a preliminary period to phase out the stuff, over several years.” Even that will impact Slovakia’s economy heavily, he believes. “Unfortunately, Slovakia has no easy route to finding alternatives for bringing in oil and gas into Slovakia.”
The biggest deal in Slovakia, on the other hand, was the recent split of the Penta Investments group, according to Lazur. “One of the founders of the group, Jozef Oravkin, announced a couple of months ago – to both partners and shareholders – that he would like to leave the venture.” They recently announced “they have agreed to a swap: his 10% stake in Penta for the Sky Park and Digital Park developments in Bratislava, worth about EUR 400 million, with the remaining 50% to be paid out in cash, over the next couple of years.” Still, that would make the new operation, Alto Real Estate, according to Lazur, “one of the significant names on the Slovakian real estate market, with further plans to focus on developing real estate mainly in Bratislava and Kosice.”
Staying on the topic of real estate, Lazur says Slovakia’s new construction law was just passed. “After almost 50 years, we have a brand-new construction law, which will significantly change how the market works and what it looks like – I think – for the better.” The new law follows the idea of a digital permitting process, he notes, “significantly reducing the number of steps – there should be just 13 basic steps for permissions – so it’s an accelerated process.” If that still seems like a long time to wait, Lazur points out that, under the current regulation, “you have about 83 steps to go through, before starting a construction project. It is really complicated, and investors had to wait for years. Especially nowadays, with the huge price increases in construction, it’s unrealistic to have to commit to projects and then have to wait for another three-to-four years.”
So, everyone is eagerly waiting for the new law and streamlined procedure to come into force in April 2024, Lazur says, but also points out there is much preparation work ahead: “during these two years, the new IT system will have to be prepared and refined, to have everything in place logistically when the time comes.”