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The Swedish property company SBB has sold the LHL hospital in Gardermoen, and an associated development site SBB owns 65 percent of, for a total of NOK 2.8 billion. The tenant, Stiftelsen Diakonissehuset Lovisenberg, is the buyer.
The sales amount is around ten percent below book value per second quarter, according to the report the press release from SBB.
Several experts have argued that the property companies’ book values are generally too high, and that there must be greater write-downs in the future. This can lead to a breach of loan terms and trigger demands for a forced sale or replenishment of equity.
SBB states that the sale will yield net proceeds of NOK 955 million, which will be used to strengthen the company’s liquidity and financial position.
Made changes
Driven by massive borrowing, SBB became a large company when interest rates were cut to zero during the pandemic. The company was once valued at 100 billion, but now has a market value of just five billion.
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In June, founder Ilija Batljan, who was the company’s strong man, stepped down as CEO. He was replaced by Akelius top Leiv Synnes, who will save what can be saved. In Tuesday’s press release, Synnes says that SBB is happy to enter into a dialogue with both their private and public tenants, if they want to buy properties from SBB.
On Sunday evening, Synnes and SBB announced that the company has strengthened its liquidity by around eight billion Swedish kroner after selling a small slice of Educo, the school and kindergarten property company it owns together with Canadian Brookfield.
The agreement means that SBB sells 1.16 per cent of the company and thus ends up with an ownership share of 50 per cent, which means that Educo becomes an associated company and not a subsidiary. This opens the way for Educo to get a better credit rating than SBB and thus access to cheaper financing.
As part of the agreement, Educo will pay back parts of an internal company loan to SBB, which in short means that SBB receives NOK 7.8 billion. The money from the transaction will be used to manage short-term financial obligations, it was stated.
New group structure
In the same message on Sunday, SBB announced that it had found a new structure in which the company will be decentralised. This is done by establishing wholly owned and partly owned business units. The group will be divided into the units “education”, “community” and “residential”.
Starting with the third quarter reporting, SBB will adopt the new company structure. According to the company, the decentralized structure will provide better access to bank financing, enable the acquisition of equity capital and provide better financial reporting and transparency. With that, SBB concluded the strategic review the board initiated in May this year.
To Dagens Industri, CEO Leiv Synnes says that in the future they will work actively to find strategic partners for the housing part or alternatively list the housing stock on the stock exchange. (Terms) Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using links, which lead directly to our pages. Copying or other forms of use of all or part of the content may only take place with written permission or as permitted by law. For further terms see here.
2023-09-26 16:41:15
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