Arias & Muñoz, headquartered in El Salvador, has strengthened its partnership with the promotion of two attorneys in its Managua, Nicaragua, office. The promotion of Roger Perez and Gustavo-Adolfo Vargas is part of the firm’s ongoing expansion of its presence throughout Central America. In January 2014, Mario Agüero, based in Honduras, entered the firm’s partnership.
Perez specializes in corporate and commercial law, M&A, real estate, and taxation. He helps local and international clients needing expertise on contracts, corporate affairs, and investments, often in the energy, free trade, and tourism sectors. He has also represented clients in the local or cross-border acquisition of real estate, investments, condominium regimes, and tourism projects. Perez counts among his clients the International Finance Corporation, the Inter-American Investment Corporation, Grupo Terra, FMO, DEG, Ram Power, and the Central American Small Enterprise Investment Fund.
“One of the government´s main goals is to change the energy matrix, and with the tax exemptions granted to this type of project, the interest of investors has increased,” Perez said. “We have been very active in the last couple of years in this sector and have participated in several M&As within this practice area.”
Perez said that if the proposed Interoceanic Canal is completed, Nicaragua will benefit considerably. Construction on the canal is expected to start in December 2014 and should wrap up by 2019.
“It will bring a lot of investment to the country, as this project demands several sub-projects to be developed,” he said. “As of today, we have received a few clients interested in setting up companies in Nicaragua to sell or lease heavy-duty machinery and equipment which the clients speculate could be needed if the project is carried out.”
Vargas specializes in corporate transactions and advises banks and international financial institutions as well as multilateral institutions in the granting of credits, along with the negotiation and structuring of agreements. He has played a role in local and regional M&A in industries as diverse as telecommunications, mining, hospitality and restaurants, and energy. In 2009, Vargas departed from the firm to pursue his LLM at Northwestern University School of Law and then spent a few years working in the Legal Division of the Inter-American Investment Corporation in Washington before rejoining Arias & Muñoz in 2013. He has represented the Inter-American Development Bank, the International Finance Corporation and the Inter-American Investment Corporation in their project financings through direct, syndicated, or a/b loans, and equity investments, as well as lines of credit to local financial intermediaries. He has also advised Grupo Priza Holding and Momotombo Power Company on cross-border M&A deals in the energy sector.
Vargas said that although M&A activity is constrained by uncertain macroeconomic conditions, which have eroded dealmakers’ appetite for Central American transactions generally, strategic deals in the renewable energy sector have gotten a boost from the Nicaraguan government´s decision to shift the country´s energy matrix to 91% renewable.
“We have seen important Colombian buyers looking for foreign assets in the region, and the results may be seen in the acquisition of a regional bank and an important Nicaraguan mining company, among other deals in the past few years,” Vargas said. “On the other hand, we have seen in Nicaragua many new renewable energy projects in the development or construction phase as the switch to renewable energy sources has become a matter of public policy by the government of Nicaragua and it is supporting it with a law that has declared the development and exploitation of renewable resources to be in the national interest and has established tax incentives for renewable energy projects.”