Marubeni-backed MM Capital Infrastructure Fund 1 from Japan has signed an agreement to acquire a 29.06% interest in joint-stock company Conexus Baltic Grid, a unified natural gas transmission and storage operator in Latvia. Following a competitive sales procedure, MM Capital Infrastructure Fund 1 agreed to acquire the shareholding in Conexus Baltic Grid from Marguerite Gas I subject to conditions in Latvia’s Energy and National Security laws.
Formation of Conexus Baltic Grid
Conexus Baltic Grid was set up in December 2016 when Latvijas Gāze was split into two independent structural entities ahead of the liberalization of the Latvian gas market in April 2017 and in line with EU regulated market principles (the EU Gas Directive). As a consequence, the unified natural gas transmission system and Inčukalns underground gas storage facility, the third largest storage facility in the EU, were transferred to Conexus Baltic Grid.
Marubeni – energy sector investor
The purchaser, MM Capital Infrastructure Fund 1, is managed by MM Capital Partners, which was formed in 2018 by Marubeni Corporation, Mizuho Bank and Asset Management One, for the purpose of operating and managing funds specialised in equity investments in overseas infrastructure assets. Marubeni Corporation, a Japanese trading and investment firm engaged in a broad range of global business activities including infrastructure, energy, metals and mineral resources, chemicals and food, has already invested in a number of natural gas-related infrastructure assets in several countries.
Our team and role in the deal
The Sorainen Latvia team supported global law firm Herbert Smith Freehills and advised MM Capital Infrastructure Fund I on performing legal due diligence of the target company, advising on Latvian law matters, assisting with drafting and signing transaction documents.