Romania: Schoenherr advises Reconstruction Capital II Limited on sale of Telecredit to PragmaGO

Schoenherr Romania advised Reconstruction Capital II Limited (RC2) on sale of an 89 % shareholding in Romanian factoring and microbusiness TELECREDIT IFN SA (operating under the brand name Omnicredit) to PragmaGO, a leading non-bank provider of SME finance in CEE. The transaction marks PragmaGO’s international expansion and market entry in Romania.

Our services covered the full range of corporate/m&a advice in connection with this private equity transaction, which was signed on 19 September 2024 in Bucharest. Closing is expected in the following months, subject to Romanian foreign direct investment authority approval, RC2 shareholder approval, and a number of other conditions precedent.

„We are happy to have been once again alongside RC2 on this transaction, which is the private equity fund’s second successful exit from a financial services business, after the sale of the Top Factoring group, in 2017, in which we also acted as legal counsel,” said partner Mădălina Neagu, who led the Schoenherr team involved in the project. „We are glad to have contributed to getting this deal done by combining our strong experience in advising on private equity investments and transactions in the financial services sector, respectively.”

RC2 is a closed-end investment company which, apart from an 85 % shareholding in Telecredit SA, has two other main investments: Policolor S.A., a leading producer of paints and chemicals with manufacturing plants in Romania and Bulgaria, and Mamaia Resort Hotels SRL, a 300-room hotel in Mamaia, Romania’s premium Black Sea resort.

PragmaGO provides financing to SMEs in the form of factoring and loans, mainly through embedded finance (BNPL and Merchant Cash Advance) – unique services that are directly integrated into the ecosystem of partners (e.g. marketplaces). Romania, which shows significant growth potential in the SME financing sector, is the first step of PragmaGO’s international expansion. Over the next three years, the company plans to enter several markets in Eastern and Western Europe.

Omnicredit, which also provides non-bank financing to SMEs, has been growing dynamically for several years. Specializing in digital factoring, Omnicredit’s receivables portfolio amounted to €6.4m at the end of 2023.

The corporate/m&a Schoenherr team advising RC2 in this transaction was led by Mădălina Neagu (partner) and included Mihaela Popescu (managing attorney at law).

Schoenherr is a leading regional law firm, with 15 offices and four country desks in Central and Eastern Europe and South-Eastern Europe. The firm has been active in Romania since 1996, providing full-service legal advice to local and multinational companies. Schoenherr Romania is ranked in by all major legal directories that survey the legal market (Chambers and Partners, Legal500, IFLR1000) for its activity in corporate/M&A and energy, respectively.

Article supported by Schoenherr & Asociatii