{"id":121676,"date":"2026-01-05T11:45:58","date_gmt":"2026-01-05T11:45:58","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=121676"},"modified":"2026-01-05T11:45:58","modified_gmt":"2026-01-05T11:45:58","slug":"romania-private-equity","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/romania-private-equity\/","title":{"rendered":"Romania: Private Equity"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-121676","comparative_guide","type-comparative_guide","status-publish","hentry","guides-private-equity","jurisdictions-romania"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Andronic and Partners<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2025\/08\/Logo_Andronic-and-Partners.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Andronic and Partners<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2025\/08\/Logo_Andronic-and-Partners.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Private Equity laws and regulations applicable in Romania<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What proportion of transactions have involved a financial sponsor as a buyer or seller in the jurisdiction over the last 24 months?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>We have seen a relatively significant proportion of the transactions we have worked on involving a financial sponsor in one form or another (approximately 40% of all deals). However, a lower proportion of these transactions featured the financial sponsor in a material or active role. Approximately 20% of our transactions involved a financial sponsor acquiring or selling a majority stake. These percentages are higher than the market average, largely due to the composition of our client base.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the main differences in M&A transaction terms between acquiring a business from a trade seller and financial sponsor backed company in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The main distinction between a trade seller and a financial sponsor backed company concerns the liability regime. As expected, financial sponsors have a limited appetite for significant post-closing or residual liability. Accordingly, we commonly see Warranty &amp; Indemnity insurance used in such transactions. Where a financial sponsor is selling a minority stake, the business risk to be undertaken by the seller is typically borne by the founders or, as applicable, by the majority strategic shareholder, while the financial sponsor\u2019s liability is usually restricted to essential matters such as title to the shares being transferred.<\/p>\n<p>In recent years, we have also observed deal-certainty mechanisms shifting increasingly in favor of sellers (not only financial sponsors, though the trend is more pronounced in their case). In particular, sellers have become generally unwilling to accept conditions to closing beyond mandatory regulatory approvals or those strictly required for business continuity.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">On an acquisition of shares, what is the process for effecting the transfer of the shares and are transfer taxes payable?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There are two main scenarios:<\/p>\n<ul>\n<li>(a) Completion is not dependent on any mandatory condition<br \/>\nIn such scenario, we have recently seen a preference for the transfer being made upon the signing of the share purchase agreement (\u201cSPA\u201d). Usually, where possible, the regulatory authorities (especially on foreign direct investments) are notified based on the preliminary (non-binding) document that is signed for the purposes of the transaction.<\/li>\n<li>(b) Completion is dependent on certain conditions (mainly regulatory) being fulfilled after the signing of the SPA<\/li>\n<\/ul>\n<p>In such case, the transfer of the shares is made after the fulfillment of the conditions, on completion.<\/p>\n<p>In both (a) and (b), the transfer is achieved by execution of a rather standard set of documents:<\/p>\n<ul>\n<li>in limited liability companies, which are the prevalent type of companies in Romania, the transfer must be authorized by the general meeting of shareholders of the company, usually with a 3\/4 majority (provided, however, that a different majority can be required under the company\u2019s articles of association);<\/li>\n<li>in joint stock companies, which are the second most prevalent type of companies in Romania and, together with the limited liability companies, represent the overwhelming majority of companies in Romania, the transfer of the shares is effected by registration with the company\u2019s shareholders\u2019 register, under the signature of the transferor and of the transferee;<\/li>\n<li>the target\u2019s articles of association is usually amended on completion in order to implement the corporate governance required by the purchaser (this is especially required for limited liability companies, as their bylaws must provide an up to date list of shareholders as per the Romanian companies\u2019 law).<\/li>\n<\/ul>\n<p>The share transfer (especially in the case of limited liability companies) is also registered with the Romanian Trade Register for third party opposability purposes. Overall, the procedure before the Trade Registry takes about one week (should they demand additional clarifications, it could be prolonged for up to two weeks).<\/p>\n<p>Additional share transfer formalities could be imposed by the target\u2019s bylaws, however, there are no supplemental mandatory formalities, such as notarization formalities.<\/p>\n<p>On a related note, it should be noted that, as of the date of this questionnaire, a new law amending the Companies Law has been adopted in the Romanian parliament and was sent to be promulgated by the president of Romania. Among the proposed amendments brought by such law is a new share transfer formality, specifically the transferee\/ the transferor or the target company in a transaction which entails a change of control over a Romanian limited liability company shall notify the Romanian tax authority within 15 days from the transfer. Should the relevant company register outstanding tax obligations, the company or the transferee will be held to create guarantees securing the payment of such tax obligations. If the formality is not observed, the transfer shall not be opposable to the Romanian tax authority. While it is not fully certain how this notification will work in practice, the potential need to create guarantees will most likely require discussions with the tax authority prior to the implementation of the transaction.<\/p>\n<p>Transfer taxes are limited to non-existent in Romania. Specifically, there are no stamp duties or notarial formalities. Trade Registry taxes (including the tax for publishing the resolution of the general meeting of the shareholders in the Official Gazette of Romania for opposability purposes) generally range from RON 300 to RON 500 (approximately EUR 60 to EUR 100).<\/p>\n<p>However, the seller will be held to pay income tax (capital gains tax) and, if natural persons, health insurance contribution.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How do financial sponsors provide comfort to sellers where the purchasing entity is a special purpose vehicle?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The most common solution would be the provision of an equity commitment letter. In the event of a leveraged acquisition, should the commitment letter not be acceptable for the purchaser, we have also seen financing commitments and\/or offers from credit institutions being presented to the sellers.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How prevalent is the use of locked box pricing mechanisms in your jurisdiction and in what circumstances are these ordinarily seen?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Completion accounts remains the prevalent mechanism for pricing in Romania. We usually see locked box in small deals involving entrepreneurs exiting a business, for price predictability purposes, and also in larger deals (mostly competitive ones), as well as in exits undertaken by financial sponsors, for the purpose of an expedite process granting deal and price certainty.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the typical methods and constructs of how risk is allocated between a buyer and seller?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Risk allocation is dealt with in various contractual mechanisms:<\/p>\n<ul>\n<li><strong>(a) Pricing:<\/strong> as already stated above, the completion accounts mechanism is prevalent in Romania, thus maintaining a portion of the economic risk on the seller side until the completion of the deal; earn-outs are also very common in transactions involving growing or not yet mature companies and businesses. On the other hand, price holdbacks are rather rare.<\/li>\n<li><strong>(b) Conditions and Interim Undertakings:<\/strong> as mentioned above, the trend in respect of conditions seems to shift slightly in favor of the seller (as conditions to completion usually cover regulatory formalities and actions which are mandatory for the deal and the continuation of the business), however, quite a few remedial, clean-up and risk avoidance actions are accepted to be fulfilled as pre-completion undertakings.<br \/>\nOn the same topic, the scope of Material Adverse Change\/Effect remains a polarizing and long debated topic in negotiations. Consensus is usually reached on events which objectively can have a material impact on the financial situation of the target company, including by reference to the impact of such events on EBITDA or revenue compared to the pre-signing results (in addition to the customary events which enter the scope of Material Adverse Change, such as natural disasters or war).<\/li>\n<li><strong>(c) Liability:<br \/>\n<\/strong><span style=\"text-decoration: underline\">&#8211; Warranties:<\/span> risk for matters which are essential for the purchaser is heavily assumed by the sellers, thus such matters are made fundamental warranties (warranties which are not qualified by disclosure and are subject to an aggravated regime of liability). Fundamental warranties usually do not extend beyond warranties concerning the title over the shares, capacity of the seller and the insolvency of the target company; however, in specific industries, they can extend to some industry-related aspects. For example, in businesses which rely heavily on IP or real estate, fundamental warranties may also cover such aspects.<br \/>\n<span style=\"text-decoration: underline\">&#8211; Indemnities:<\/span> disclosed risks which are material for the target are covered by indemnities. It is customary in Romania for specific liability baskets to be set for such indemnities, as well as clear time limitations for the seller\u2019s liability thereunder. Thus, for exposure exceeding such baskets, risk is undertaken by the purchaser.<br \/>\nOne matter which appears to be more particular for Romania is the treatment of pre-completion tax exposure, i.e., it becomes quite generally accepted that sellers assume indemnities for pre-completion tax exposure, especially in business transferred by founders (this is a result of the general tax uncertainty in Romania).<br \/>\n<span style=\"text-decoration: underline\">&#8211; Limitation of liability:<\/span> it is customary for sellers to benefit from clearly defined baskets of liability, including (i) a general limitation of liability for all potential claims under the SPA amounting to the purchase price effectively received in the transaction, (ii) liability for fundamental warranties which is usually capped at the value of the purchase price effectively received in the transaction, (iii) liability for business warranties which is usually capped at 15% to 35% of the purchase price. Also, as per the above, (iv) indemnities benefit from specific baskets. Exposure exceeding such limits is incurred by the purchaser.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How prevalent is the use of W&I insurance in your transactions?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Romania the appetite for contracting W&amp;I insurance in deals that do not involve a financial sponsor is still rather low. Having said that, W&amp;I insurance is prevalent when the main seller is a financial sponsor.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How active have financial sponsors been in acquiring publicly listed companies?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The take-private activity by financial sponsors is almost non-existent. Overall, the number of public to private transactions in Romania remains insignificant compared to the broader European M&amp;A market.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Outside of anti-trust and heavily regulated sectors, are there any foreign investment controls or other governmental consents which are typically required to be made by financial sponsors?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Foreign direct investment screening (\u201cFDI Clearance\u201d) is the main regulatory consent which must be sought prior to the completion of a transaction. Legislative amendments in the last years have greatly extended the number of transactions entering the scope of the FDI Clearance. In brief, all transactions made by both EU (including Romanian investors) and non-EU investors fulfilling the following conditions shall undergo FDI screening: (i) the value of the transaction exceeds EUR 2 million (computed in accordance with applicable law) and (ii) the transaction is made in one of the sectors considered sensitive by the law (it should be noted, however, that such sensitive sectors are defined very broadly, thus, most transactions would fall in the scope of such sectors, including energy, transport, infrastructure and supply chains, etc.). However, a transaction below the threshold mentioned above could still fall under FDI Clearance regime if it is deemed to affect national security or public order or pose risks to them. The FDI Clearance is required for any direct or indirect change of control within a foreign investor\u2019s ownership structure when the new controlling entity meets the criteria of an investor, including situations where the change of control takes place outside Romania.<\/p>\n<p>Other than the above, there are sector-specific consents which would be required, including, for example, (a) credit institutions (banks, financial leasing companies) which must fulfill certain formalities with the National Bank of Romania, or (b) companies which are supervised by the Romanian Financial Supervisory Authority (insurance companies, investment companies, private pension companies) which must fulfill certain formalities with such supervisory authority.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How is the risk of merger clearance normally dealt with where a financial sponsor is the acquirer?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There are two approaches which we have seen in deals: (i) if the financial sponsor does not have investments in the same sector then the sponsor may either (a) agree to accept commitments if required by the competition authority, on the basis that such commitments are unlikely to be triggered, or (b) require that the transaction be conditional solely upon obtaining an unconditional merger clearance. The rationale is that any request for commitments in this scenario would be unexpected and could create unforeseen consequences.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Have you seen an increase in (A) the number of minority investments undertaken by financial sponsors and are they typically structured as equity investments with certain minority protections or as debt-like investments with rights to participate in the equity upside; and (B) \u2018continuation fund\u2019 transactions where a financial sponsor divests one or more portfolio companies to funds managed by the same sponsor?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In respect of question (A), the number of minority investments undertaken by financial sponsors has indeed increased during the last years due to the setup of new Romanian investment funds (typically with EIF backing). We usually see such investments structured as equity investments, with debt-like investments being preferable only in respect of early startups and in companies in the early stages of development, in respect of which convertible loans (backed by priority reimbursement and\/or liquidation preference) are preferred by investors.<\/p>\n<p>In respect of question (B), the number of such transactions also increased, reflecting the general upward trend in the industry.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are management incentive schemes typically structured?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Management incentive schemes are most commonly structured as equity-based awards, typically in the form of stock options granted subject to performance-based vesting. Vesting is usually linked to the achievement of agreed KPIs over a medium-term period, often three to five years, aligning management rewards with long-term engagement for company development. However, where management roll over the value they have earned under a prior incentive scheme into the new investment structure on a sponsor-to-sponsor sale, those vesting terms fall away, and the rolled interest usually participates directly in the next exit alongside the incoming sponsor.<\/p>\n<p>Equity incentives are generally preferred as they benefit from more favorable tax treatment (subject to the conditions outlined in the answer to question 13) and naturally promote retention and sustained commitment of key individuals. Where multiple managers participate, equity is frequently held through a dedicated management incentive vehicle to streamline administration and corporate governance of operational companies.<\/p>\n<p>Cash-based bonuses, usually determined by performance metrics agreed with management, are used less frequently, due mainly to the comparatively less advantageous tax position and their tendency to incentivize short-term results.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any specific tax rules which commonly feature in the structuring of management's incentive schemes?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Romania, the income of managers (specifically corporate officers such as directors and executive managers) is generally taxed as employment income, which is subject to a higher overall tax burden compared to non-employee income. Consequently, cash-based incentives are also taxed under this regime and are subject to income tax and social security contributions.<\/p>\n<p>By contrast, equity-based incentives may benefit from preferential tax treatment, provided they are structured in accordance with the Romanian tax code. Specifically, equity grants under a pre-approved stock option plan with a minimum vesting period of one year are taxed as capital gains, rather than as salary income, resulting in a lower effective tax rate.<\/p>\n<p>Structuring management incentive schemes is further simplified from a tax perspective when the manager rolls-over its previous entitlement, becoming a shareholder of the company. In such cases, the equity incentive is linked to the manager\u2019s shareholder status, allowing the incentive to benefit from the more favorable capital gains treatment, rather than being classified as employment income.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are senior managers subject to non-competes and if so what is the general duration?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, it is common for senior managers to be subject to non-compete obligations. It is common for such obligations to be undertaken for the duration of the manager\u2019s engagement with the relevant company and for a period ranging from six months to two years thereafter, with undertakings often leaning toward the longer end of this range, depending on the seniority of the manager.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How does a financial sponsor typically ensure it has control over material business decisions made by the portfolio company and what are the typical documents used to regulate the governance of the portfolio company?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There are two mechanisms through which financial sponsors maintain control over the material business decisions by a portfolio company:<\/p>\n<ol>\n<li>certain key matters are reserved for the decision of the general meeting of shareholders, and their approval is conditional upon the affirmative vote of the financial sponsor. These reserved matters typically include corporate changes, significant transactions, affiliate and consultancy agreements, budget approval, major financing, and other strategic decisions.<\/li>\n<li>the financial sponsor appoints one or more members to the company\u2019s board of directors. Decisions falling under board competence may therefore be approved only with the favorable vote of the sponsor-appointed director(s). This allows the sponsor to exercise direct oversight and influence at the management level.<\/li>\n<\/ol>\n<p>It should be noted that Romanian limited liability companies grant much less flexibility in respect of management powers and decision-making rules. The law recognizes only the position of director, without distinguishing between executive and non-executive functions and without a statutory supervisory board. Although collegial management bodies (i.e., boards of directors) are often implemented through the shareholders\u2019 agreement and articles of association, such arrangements do not fully eliminate the liability exposure of non-executive directors for the management of the relevant company. For this reason, in limited liability companies, material matters are typically reserved to the general meeting of shareholders, where the sponsor can exercise reliable and liability-free control.<\/p>\n<p>Unlike limited liability companies, joint stock companies can adopt a two-tier management system. Such system allows the financial sponsor to appoint a supervisory board which can supervise and approve certain matters of importance for the investor, while executive matters are delegated to executive managers.<\/p>\n<p>The governance of a portfolio company is typically regulated through:<\/p>\n<ul>\n<li>the shareholders\u2019 agreement, setting out, inter alia, reserved matters, management structure, voting thresholds, investor protection mechanisms, and share transfer rights and obligations. Non-compliance with the obligations in the shareholders\u2019 agreement constitutes a breach of contract and ordinarily entitles the other shareholders to seek damages;<\/li>\n<li>the articles of association, implementing the company\u2019s governance structure and other rules set out in the shareholders agreement. Failure to observe the provisions of the articles of association can trigger statutory remedies, such as actions seeking the annulment of resolutions passed without complying with the prescribed majority and quorum thresholds.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is it common to use management pooling vehicles where there are a large number of employee shareholders?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, this method is widely used in private equity deals. On the other hand, this method is not common in other types of deals and structures, however, we have seen it used.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the most commonly used debt finance capital structures across small, medium and large financings?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Across small capital financings, companies would typically rely on straightforward bank lending. These structures usually involve a single bank providing loans for capital expenditure. Security packages are usually limited to basic corporate guarantees and asset collateral, reflecting the smaller scale and less complex nature of the funding need.<\/p>\n<p>In medium capital transactions, financing may involve several lenders with a broader security package and a more tailored covenant structure. In some cases, companies may add mezzanine financing to the structure.<\/p>\n<p>Large capital financings are typically more sophisticated and are frequently structured using syndicated loan arrangements, where several banks share the credit exposure. These structures can include separate layers of senior, subordinated and mezzanine debt, and occasionally shareholder loans to further support the debt structure. Facilities are frequently accompanied by intercreditor arrangements, comprehensive security packages and more advanced covenant structures, reflecting risk allocation among stakeholders.<\/p>\n<p>While corporate bonds and capital markets funding exist in Romania, they remain relatively uncommon, particularly when compared with traditional bank-led solutions. Bond financing is feasible only for joint stock companies and tends to be used infrequently outside large scale or strategic issuances.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is financial assistance legislation applicable to debt financing arrangements? If so, how is that normally dealt with?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Romania, financial assistance rules apply primarily to joint-stock companies and restrict their ability to provide funding or guarantees for the purpose of acquiring their own shares. The law provides only two exceptions: (i) financial assistance granted by credit institutions in the ordinary course of business, and (ii) assistance related to the acquisition of shares for allocation to the company\u2019s employees.<\/p>\n<p>A common way to address these restrictions is to convert the target company into a limited liability company, since Romanian practice generally views the financial assistance prohibition as not applicable to such companies. It should be noted that the risk of the operation entering the prohibition on misuse of corporate assets (i.e., the use of a company\u2019s funds, property or credit for purposes that go against its interest or for the personal benefit of a shareholder or manager) remains in such scenario.<\/p>\n<p>Alternatively, acquisition financing can be raised at the level of an acquisition vehicle, which, after completion, can implement a debt pushdown, most commonly through a merger with the operational company. This approach enables lenders to obtain security over the target\u2019s assets without breaching financial assistance rules.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">For a typical financing, is there a standard form of credit agreement used which is then negotiated and typically how material is the level of negotiation?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Romania, financing transactions are typically based on the lender\u2019s standard draft agreements; however, such drafts are generally aligned with market-standard terms, often following LMA-style drafts.<\/p>\n<p>The level of negotiation varies depending on the size of the financing and the leverage of the borrower, but in most cases the negotiation is moderate rather than extensive.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What have been the key areas of negotiation between borrowers and lenders in the last two years?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>As per the above, negotiations are rather limited, however, covenants, security, financial reporting, and mandatory prepayment events are common topics of negotiations.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Have you seen an increase or use of private equity credit funds as sources of debt capital?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In recent years, there has been a significant increase in the use of private equity credit funds as providers of debt capital in Romanian transactions. While traditional bank lending continues to be dominant, credit funds are becoming increasingly active in sponsor-backed deals, growth financings, and situations requiring greater flexibility than banks are typically willing to offer.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">3829<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/121676","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=121676"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}