Michelmores has advised the Finnish Fund for Industrial Cooperation Ltd (Finnfund) on its $10m investment into Proteak, a sustainable forestry operation based in Mexico that manufactures teak products such as building materials and cutting boards.
Finnfund is a development finance institution owned by the Finnish Government and provides long-term risk capital for private projects in developing countries.
Finnfund’s investment into Proteak is intended to fund three related projects, namely the development and operation of a Medium Density Fibreboard (MDF) production facility in Mexico’s Tabasco state, the acquisition of approximately 10,000 hectares of eucalyptus plantations in order to provide the raw-material base for the MDF project, and the installation of a co-generation plant to fulfil the facility’s energy requirements. The MDF facility is expected to start production in the second half of 2015.
The Michelmores team comprised Partner Joe Whitfield and Solicitor Harry Trick. Mexican law advice was provided by Eduardo Gonzalez of Creel, García-Cuéllar, Aiza y Enríquez.
Hanna Skelly, a Director at Finnfund who led this investment, commented:
“The forestry sector is important for Finnfund, not only as the sector produces significant developmental impacts, but also from the Finnish forestry expertise point of view. Almost 20% of Finnfund’s investments are in this or related sectors. Even so, closing a transaction in a new market is always challenging and, as in this case, greatly assisted by experienced advisors.”
Joe Whitfield, head of the Michelmores’ Emerging Markets team and with over 25 years’ experience advising on investments in frontier markets, commented:
“Having recently advised Finnfund on investments in a number of jurisdictions, including Mozambique, Ghana, Cambodia and China, we are delighted to have assisted them on their first forestry investment in Mexico. By making available risk capital to environmentally sustainable businesses, Finnfund continues to play an important role in the development of businesses and the creation of jobs in the emerging markets.”