Swedish real estate company SBB has sold the LHL Hospital in Gardermoen, the associated development site SBB owns 65 percent, for a total of NOK 2.8 billion. The lessee, Stiftelsen Diakonissehuset Lovisenberg, is the buyer.
According to the report, sales volume was approximately ten percent less than the book value in the second quarter Press release from SBB.
Many experts have argued that the book values of real estate companies are generally too high, and that there should be larger write-downs in the future. This can lead to a violation of the terms of the loan and give rise to claims for forced sale or renewal of ownership rights.
SBB said the sale would generate net proceeds of NOK 955 million, which would be used to strengthen the company’s liquidity and financial position.
Changes have been made
Thanks to massive borrowing, SBB became a big company when interest rates were cut to zero during the pandemic. The company was once worth $100 billion, but its market value is now only five billion.
In June, founder Ilya Batalian, who was the company’s strongman, stepped down as CEO. He was replaced by Akelius Top Leiv Synnes who will salvage what can be salvaged. In Tuesday’s press release, Synnes said SBB is happy to engage in dialogue with public and private tenants if they want to purchase properties from SBB.
On Sunday evening, Synnes and SBB announced that the company had boosted its liquidity by about eight billion Swedish krona after selling a small slice of Educo, the school and kindergarten real estate company it owned with Canadian company Brookfield.
The agreement means that SBB sells 1.16 percent of the company and thus ends with a 50 percent ownership stake, meaning Educo becomes an associate rather than a subsidiary. This opens the way for Educo to obtain a better credit rating from SBB and thus access to cheaper financing.
As part of the agreement, Educo will repay parts of the company’s internal loan to SBB, which in short means SBB gets NOK 7.8 billion. He stated that the funds generated from the deal will be used to manage short-term financial obligations.
New group structure
In the same message on Sunday, SBB announced that it had found a new structure in which the company would be decentralized. This is done by creating wholly owned and partly owned business units. The group will be divided into “educational”, “community” and “residential” units.
Starting with the third quarter reports, SBB will adopt the new corporate structure. According to the company, the decentralized structure will provide better access to bank financing, enable access to capital and provide better financial reporting and transparency. In doing so, SBB concluded the strategic review initiated by the Board of Directors in May of this year.
As for Dagens Industri, CEO Leiv Synnes says that in the future they will actively work to find strategic partners for the housing segment or, alternatively, list the housing stock on the stock exchange.(conditions)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using links that lead directly to our pages. No copying or other use of all or part of the Content may be permitted except with written permission or as permitted by law. For more terms see here.
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