SBB sells properties for SEK 1,350 million, increases its ownership in PPI and enhances liquidity
Summary by AI BETAClose X
Samhällsbyggnadsbolaget i Norden AB (publ) ("SBB") has entered into agreements to sell a portfolio of social infrastructure properties to its associated company Public Property Invest AB (publ) ("PPI"). The underlying property value amounts to approximately SEK 1,350 million and the consideration will be settled through a combination of a cash payment and newly issued shares in PPI. The Transaction is made at a discount of approximately three per cent.
The Transaction comprises six properties with a combined lettable area of approximately 63,400 sqm, an estimated annual net operating income of SEK 76.1 million upon completion and an average remaining lease term of 8.1 years. The three largest properties together account for approximately 84 per cent of the Transaction value and consist of a newly built elderly care home in Stockholm with Ersta Diakoni as tenant on a 15-year lease agreement, a recently fully renovated police station just outside central Helsinki, and an ongoing project in Karlskrona where SAAB has recently signed a 10-year lease agreement for the entire property. The Transaction also includes two additional social infrastructure properties in Karlskrona, with Karlskrona Municipality as the primary tenant, complementing PPI's other holdings in Karlskrona.
From the agreed property value of approximately SEK 1,350 million, a deduction of approximately SEK 88 million has been made for remaining project costs. The net consideration of approximately SEK 1,263 million will be settled through a cash payment of approximately SEK 250 million and approximately SEK 1,013 million through the issue of 39,453,642 new shares in PPI at the most recently reported net asset value of SEK 25.67 per share.
The cash portion of the consideration releases liquidity and strengthens SBB's balance sheet. At the same time, the share consideration increases SBB's ownership in PPI from approximately 41 per cent to approximately 43 per cent.
“The Transaction is a good example of the transition SBB has undergone in recent years. We have progressively developed and worked with our remaining investment and project properties, with the aim of subsequently divesting them to property management organizations. In this case, the Transaction is carried out with one of our associated companies, meaning that we will continue to participate in the value creation in the Portfolio. We are releasing capital and increasing our financial flexibility, while the share consideration gives us continued exposure to social infrastructure and creates better conditions for SBB's continued development and long-term value creation,” said Andreas Morfiadakis, CEO of SBB.
The Transaction is expected to be completed in the fourth quarter of 2026, subject to customary conditions for completion. The conditions include approval by the shareholders of SBB and PPI at separate extraordinary general meetings. Completion of the part of the Transaction relating to SAAB's premises in Karlskrona is also subject to approval by the Inspectorate of Strategic Products (ISP) and the tenant.
The proposal was prepared for the Company's Board of Directors following negotiations. Lennart Sten has not participated in the Board's preparation of, or resolution regarding, the Transaction due to his position as Chairman of the Board of both SBB and PPI. In addition, Board member Ilija Batljan has refrained from participating in the preparation of, or resolution regarding, the Transaction due to his position as Chief Investment Officer of PPI and his previous role as interim CEO of PPI.
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