When Seeking Opportunities Abroad, We Favour Local Firms For Due Diligence
When Redes Energéticas Nacionais is looking for new business in foreign jurisdictions, it prefers to use lawyers that are close to the target of the deal, says Marta Almeida Afonso
Portugal's Redes Energéticas Nacionais (REN) - a private electricity transmission and natural gas transportation and storage company - has embarked on an internationalisation drive, as part of the second phase of its reprivatisation process. To this end, the Lisbon-based listed company has already entered into strategic agreements with China's State Grid and Oman Oil.
When deciding whether to use external advice or utilise the company's in-house legal team to advise on such initiatives, REN makes its decision based on a number of factors, including the jurisdiction which the matter relates to and whether or not it concerns a new line of business, according to head of legal Marta Almeida Afonso. "When we have issues abroad, it depends on whether we are chasing a new opportunity, or whether it is a day-to-day case." She adds that, when it comes to seeking new opportunities, REN outsources its due diligence work to an external law firm, relying on the analysis carried out by local lawyers, while the negotiation of the final purchase agreement and any subsequent agreements are carried out by both local lawyers and REN's in-house legal team. "What we have done in the past is to use local firms, close to the transaction target, which do not have a presence in Portugal," she says.
Almeida Afonso says that when REN is handling matters in Portugal the company usually uses its in-house legal team - given its knowledge of Portuguese law - and seeks advice from external law firms in relation to specific matters. However, when dealing with matters in other countries the company chooses "the best firm in the local market". She adds: "If that law firm has a presence in Portugal, we can use the contacts here to make the local lawyers understand how important REN is in Portugal, although that is not a strict criterion."
REN's current strategy is to develop its business in the Iberian Peninsula and also enhance its involvement in interconnections between the peninsula and the rest of Europe and North Africa. In addition, the company is aiming to increase its international expansion, particularly in Mozambique and South America. REN is also active in telecommunications through Rentelecom, which provides infrastructure, managed services and consultancy.
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