SBB sells community property portfolio worth $3.4 billion in a deal with Sweden
The struggling Swedish real estate group SBB announced on Tuesday that it would sell its portfolio of community properties to Public Property Invest, a publicly listed company in Oslo. This transaction valued the assets at approximately 32 billion Swedish crowns (3.40 billion dollars), and was part of its efforts to reduce its debt.
SBB, which is a property firm that owns hospitals and care homes among other properties, has been forced to restructure its debt and reduce it due to high interest rates, and the economic downturn, especially in Sweden.
The deal involves three wholly-owned subsidiaries collectively called "SocialCo", which comprises around 740 properties in Sweden, Norway, Denmark, and Finland. SBB is expecting to receive net cash proceeds of more than 11 billion Swedish Crowns, which they plan to use for redemption or repurchase of outstanding bonds as well as other purposes.
The company stated that the transaction will generate annual operating synergies in excess of 100 million Swedish crowns.
Leiv synnes, CEO of SBB, said: "The proceeds of this divestment allow us to manage our credit profile efficiently, improve our financial stability and take advantage of a more favorable financing environment."
Aker announced in a separate press release that as part of the agreement, Norway's Aker committed, through APG Invest to subscribe for 1.3 Billion Norwegian Crowns in a Private Placement, to acquire a part of the PPI non-voting share issued to SBB at a cost of 4.1 Billion Norwegian Crowns, and to exchange 3.9 Million ordinary PPI for a number of nonvoting shares owned by SBB.
The transaction will close either in the fourth or first quarters of 2025, depending on shareholder and regulatory approvals. SBB stated that PPI would become Europe's biggest listed social infrastructure platform with assets totaling $5.28 billion Norwegian crowns. SBB said that $1 = 9.4155 Swedish Crowns ($1 = 10.0041 Norwegian Crowns)
(source: Reuters)