Sales-enhancing transaction using a lease-and-leaseback agreement (EUR 5 million)

The ARTE LEGAL team advised on a transaction aimed at increasing sales for a client in the packaging industry, based on a framework lease agreement model, individual lease agreements, and obtaining external financing for the production of rented goods under a so-called sale and leaseback arrangement.

The transaction was intended to increase the client’s production and then sell the manufactured goods to the lessor. Under a master leaseback agreement, the client obtained the right to use the manufactured goods and transfer them for further use – based on lease agreements – to an international corporation producing electrical equipment, which used them in its factories and supply chain throughout Europe. Instead of incurring a one-time purchase cost of goods worth a total of €5 million, the international corporation gained the option to pay a lease for their use over a specified period. In turn, the firm’s client received reimbursement of the entire production costs of the goods, plus a margin – under the leaseback agreement.

The law firm’s team, led by Mateusz Mrzygłod, was responsible for the entire process: from the analysis of the needs and structure of the transaction and the preparation of the legal concept of the transaction – taking into account the model of external financing of the production of goods and their leasing to an international corporation – to the preparation of comprehensive contracts, i.e.:

• agreements ensuring financing of the transaction – framework sale and leaseback agreements, individual sale and leaseback agreements and security for these agreements (under Polish law),
• contracts related to the lease of goods to an international corporation – framework lease agreements and individual lease agreements (under Swedish law),

as well as their negotiation and conclusion. At every stage of the transaction, the law firm protected the client’s interests – both from a business and legal perspective.

Thanks to the work of the ARTE LEGAL team, the client, using the lease agreement, was able to increase the sales of its goods with the participation of external production financing – without the need to engage its own capital and with the financing costs fully covered by the end customer.