Shares of Sweden's SBB plummet after report encouraging investors to sell (updated)

Samhallsbyggnadsbolaget I Norden AB

04/11/2024 13:54

(Adds CEO LinkedIn post in paragraphs 6-7, updates share price
in paragraph 4)
       STOCKHOLM, Nov 4 (Reuters) - Shares in Swedish property
group SBB  SBBb.ST  tumbled as much as 27% on Monday with
analysts pointing to a report in a Swedish business daily that
encouraged investors to sell their stakes in the debt-laden
company.
    Daily Dagens Industri in an analysis published on Saturday
headlined "Sell now, before it is too late" said SBB's cash flow
had "collapsed", referring to the company's well known financial
problems. This jeopardised the company's ability to pay back
debt on time, the analysis said.
    SBB's Chief Executive Leiv Synnes, in a post on LinkedIn
commenting on the Dagens Industri report, said the company
continued to work on reducing its debt.
    "Currently, SBB's objective is to reduce its debt,
significantly lowering the cost of financial stress by
amortising loans instead of refinancing them," Synnes wrote.
    SBB can also continue to reduce financial strain by forming
subsidiary and associate companies with a capital structure that
allows them to obtain loans on better terms than the parent
company, said Synnes, who took the helm in 2023.
    SBB's shares were down 21.8% at 1311 GMT and have fallen by
more than 10% this year.
    SBB was at the centre of a Swedish property market bubble
that unravelled in 2022 when inflation and interest rates
soared, and the company has said it is still in a process of
mending its finances, including by spinning off subsidiaries.
    "As we have previously communicated, the work to strengthen
the company's financial position continues and is progressing
according to plan," SBB said in a statement to Reuters on
Monday.
    Carlsquare analyst Bertil Nilsson said the Dagens Industri
report was a negative catalyst for SBB's share price,
highlighting the company's debt and liquidity issues.
    Swedish residential real estate group Sveafastigheter
 SVEAF.ST , owned by SBB, in October listed on the Nasdaq First
North Premier Growth Market, pricing its shares at the bottom of
its touted range.
    Analysts have said the spin-off would allow SBB to free up
capital over time by reducing its shareholding in
Sveafastigheter.

 (Reporting by Simon Johnson in Stockholm and Elviira Luoma in
Gdansk; writing by Louise Rasmussen, editing by Terje Solsvik
and Susan Fenton)
 ((Louisebreusch.rasmussen@tr.com; +45 21 27 97 79;))