Advisory on Transactions Involving EU Funds Beneficiaries

GJW Gramza i Wspólnicy advises on transactions involving a beneficiary of EU funding or an entity linked to a project (e.g., a consortium partner, special purpose vehicle, or key subcontractor). We support clients in assessing whether a planned transaction (such as the sale of shares or a business, reorganization, contribution in kind, merger, demerger, or asset acquisition) complies with the terms of the funding agreement and whether it requires the consent of the financing institution (the party to the funding agreement). We also provide analysis of the transaction’s impact on project settlements, performance indicators, durability requirements, and information and documentation obligations.

In transactions involving beneficiaries, it is essential to preserve the continuity of the project and its objectives, as well as to mitigate risks related to the eligibility of expenditures, the possibility of financial corrections, or the obligation to repay the funds. We pay particular attention to the risk of losing SME status, which may result in a reduction of the funding level or the obligation to repay it in full.

Legal Support in M&A Transactions Involving EU Funds Beneficiaries

Scope of our services:

• analysis of project documentation from the perspective of the transaction: grant agreement, amendments, guidelines, timetable, indicators, durability requirements, and information obligations,
• assessment of whether the planned transaction requires the consent of the relevant institution, and preparation of the consent application together with justification and supporting evidence,
• due diligence review in the area of funding-related risks: identification of areas that may result in a financial correction, reduction of funding, or repayment obligation,
• verification of the transaction’s impact on project durability, restrictions relating to ownership changes, and obligations to maintain output and result indicators,
• assessment of the legal effects of the succession of rights and obligations under contracts concluded pursuant to the Public Procurement Law (PZP) and the competitiveness principle,
• advice on the eligibility of expenditures after the transaction (continuation of settlements, record-keeping, archiving, and audit trail),
• drafting and negotiation of transaction provisions protecting against project-related risks: conditions precedent, representations and warranties, indemnity clauses, and price adjustment mechanisms,
• support in planning and documenting project changes resulting from the transaction: change requests, amendments, updates to the timetable and budget,
• coordination of project-related contractual matters: transfer or amendment of contracts with contractors and suppliers in a manner compliant with the financing conditions,
• support in communications with the institution during the transaction review process, including preparation of positions and responses to requests for information.

Our approach

We focus on ensuring that the transaction remains consistent with the beneficiary’s obligations and does not disrupt the implementation or settlement of the project. We combine analysis of funding documentation with the design of transaction mechanisms that allocate the identified risks to appropriate contractual clauses and to the post-closing action plan. As a result, our client gains confidence that the planned merger, acquisition, or reorganization does not jeopardize the awarded EU funding, does not lead to repayment of the EU grant, a financial correction, or challenges to the eligibility of expenditures, and allows for the safe development of the business.