SMP
November 26, 2020 Press

Tokenization: first blockchain-based "digital twin" of a listed stock with RKH and SMP

Berlin - SMP and Raschke von Knobelsdorff Heiser (RKH) advised publity AG, an asset manager and investor specialised in office real estate in Germany, listed on the Frankfurt Stock Exchange (Scale), on the tokenisation of up to 50 million shares of its subsidiary PREOS Global Office Real Estate & Technology AG (PREOS).

PREOS, listed on the Munich Stock Exchange (m:access), is an active real estate investor focused on office real estate. It is the first listed company in the world whose shares are digitally securitised by a Blockchain-based "digital twin" (PREOS token). The PREOS Tokens will be issued by publity AG by way of a public offering in Germany and Austria on the basis of a securities prospectus, approved by the Federal Financial Supervisory Authority (BaFin) on 23 November 2020, and an international private placement. The medium to long-term goal is a total token volume of up to one billion euros. This is the largest tokenisation in the real estate industry worldwide.

The PREOS token is based on the Ethereum block chain and guarantees essential shareholder rights. Each PREOS token corresponds to one PREOS share. The token holder has a digitally deposited non-cash asset on the Blockchain and can exchange his token for a conventional PREOS share at any time. The tokenised shares, which provide the same dividend and voting rights at the Shareholders' Meeting of PREOS as all other PREOS shares, are held in custody by a collateral trustee.

The project broke new legal ground in several respects. On the one hand, the underlying trust structure of the token, which is similar to an owner instrument, had to be contractually mapped and classified in accordance with the prospectus law in agreement with BaFin. At the same time, the structure had to be coordinated with several regulated partners simultaneously in order to implement the PREOS platform. This applied in particular to the comprehensive coordination of the money laundering concept with the securities trading bank, Bankhaus Scheich Wertpapierspezialist AG, which is involved as an investment intermediary in the planned OTC secondary market.

RKH has been advising the publity group on corporate, capital market and transaction law issues for several years. RKH has played a leading role in the structuring of the project and has advised publity AG on the corporate and capital market law requirements as well as the requirements under prospectus law. The team led by SMP partner Daniel Resas, which is specialized in digital assets and tokenization and which was brought in at RKH's recommendation, was responsible for the legal conception and tax treatment of the PREOS tokens, the regulatory advice on the PREOS platform as well as the negotiations with Bankhaus Scheich and the crypto-custodian Upvest.

publity
publity AG ("publity") is an asset manager and investor specialised in office real estate in Germany. The company covers the core of the value chain from the acquisition to the development and the sale of real estate. With over 1,100 transactions in the past seven years, publity is one of the most active players in the real estate market. Currently, the company manages a portfolio with a value of over five billion euros. publity is characterized by a sustainable network in the real estate industry and in the Work-Out departments of financial institutions. In recent years, publity has digitalised the German office real estate market, with the result that its subsidiary PREOS possesses all the information on 9,500 relevant properties in the most important locations at all times.

PREOS
PREOS, listed on the Munich Stock Exchange (m:access), is an active real estate investor focused on office real estate. It is the first listed company in the world whose shares are digitally securitised by a Blockchain-based "digital twin" (PREOS token).

About SMP
SMP is a boutique law firm for tax and business law which is active in the core fields of Tax, Funds, Corporate, Litigation and Transactions. The attorneys and tax specialists at SMP represent a broad client base, which ranges from emerging technology companies and family-run SMEs to large corporations as well as private equity and venture capital funds. Founded in 2017, SMP has become one of the leading players for venture capital, private equity and fund structuring in Germany. The firm and its partners have been recognized nationally and internationally by JUVE, Best Lawyers, Legal 500, Focus and Chambers and Partners. Today, SMP has more than 50 experienced lawyers and tax specialists in three Offices in Berlin, Hamburg and Cologne.

Advisors publity: SMP
Daniel Resas (Lead, Digital Assets/Capital Markets/Supervisory Law), Associated Partner
Dr. Niklas Ulrich (Co-Lead, Supervisory Law), Associate
Dr. Jörn Wöbke (Corporate/Capital Markets/M&A), Partner
Stefan Richter (Tax), Partner
Lennart Lorenz (Supervisory Law), Partner
Matthias Kresser (Finance and Insolvency law), Senior Associate
Dr. Moritz Diekgräf (Corporate/Capital Markets/M&A), Associate
Dr. Saskia Kleinpeter (Tax), Associate
Dr. David John (Supervisory Law), Associate (has left SMP)

Advisors publity: RKH
Dr. Kristian J. Heiser (Lead, Corporate/Capital Markets/M&A), Partner
Dr. Thorsten Raschke (Corporate/M&A), Partner
Prof. Dr. Christian Möller (Tax), Of Counsel
Dr. Jan Hermann (Prospectus Law/M&A), Counsel
Maximilian Neeb (Corporate/Capital Markets/M&A), Associate
Markus Korinth (Corporate/ Capital Markets/M&A), Associate
Cornelius Karcher (Corporate/ Capital Markets/M&A), Associate
Markus Schweyer (Corporate/ Capital Markets/M&A), Associate

Advisors publity: KNPZ
Dr. Kai-Uwe Plath (Data Protection), Partner

Advisors Bankhaus Scheich: Waldeck Rechtsanwälte
Dr. Hendrik Pielka, Partner
Jan Liepe, Partner
Jens-Holger Petri, Partner

Advisors Upvest (Crypto Custodian): Lindenpartners
Dr. Robert Oppenheim, Partner