Swedish real estate group SBB secures cash with JM stake sale (updated)

JM AB

12/05/2023 08:50

* 
      SBB raises $276 mln from JM stake sale
    

        * 
      Shares sold at less than half the price paid in 2021
    

        * 
      Real estate industry hit by rising interest rates
    

        * 
      SBB scrapped share issue earlier this week
    

        * 
      Further divestment likely, analyst says
    

  
 (Adds analyst in 7th and 8th paragraphs, share price, detail,
switches dateline to STOCKHOLM)
       STOCKHOLM, May 12 (Reuters) - Troubled Swedish real
estate group SBB  SBBb.ST  has sold most of its shares in
construction company JM  JM.ST  for 2.8 billion Swedish crowns
($276 million), the company said, taking a significant loss on a
stake bought less than two years ago.
    The transaction gives SBB a much-needed cash infusion after
scrapping a share issue this week when ratings agency S&P Global
downgraded the company's debt to junk status.
    Rising interest rates, soaring inflation and growing debt
have hit real estate companies in Sweden, which the country's
policymakers see as a risk to financial stability.
    SBB shares rose as much as 8% early on Friday, before
reversing to trade flat at 0744 GMT. The stock is down 61% year
to date.
    The company said it had sold 19 million shares in JM,
corresponding to a stake of 29.5%, at a price of 148.1 Swedish
crowns per share, reducing SBB's stake to just 2.9%.
    "The sale enables a focus on the company's core business and
a further strengthening of SBB's financial position," SBB
founder and CEO Ilija Batljan said in a statement released late
on Thursday.
    An SBB spokesperson declined to give further comment.
    SBB originally bought most of the shares, a roughly 20%
stake, in June 2021 for 326.30 crowns per share.
    The sale at less than half that price could trigger an
accounting loss of some 3 billion crowns, Carlsquare analyst
Bertil Nilsson said.
    SBB is likely to continue selling off assets this year to
reach a goal of divestment amounting to 6 billion crowns, the
analyst added.
    The company said last year that it regarded its JM stake as
a strategic asset and that it should be viewed as a long-term
investment.
    SBB's shares are subject to more short-selling than any
other Swedish stock, data from the country's financial regulator
shows, with 19% of the total sold short as traders expect the
company's value to decline.
        ($1 = 10.1526 Swedish crowns)

 (Reporting by Terje Solsvik, Marie Mannes; editing by Louise
Rasmussen and Jason Neely)
 ((terje.solsvik@thomsonreuters.com; +47 918 666 70))