Landlord SBB Gets $720 Million Cash Boost in Brookfield Deal

Samhallsbyggnadsbolaget i Norden AB — as the company is officially known — will get a cash injection of 8 billion Swedish kronor as part of the complex deal, largely closing its near-term funding gap. The shares surged as much as 40%, and the company’s senior unsecured bonds maturing in 2029 gained 1.5 cents on the euro, according to data complied by Bloomberg.

SBB is the epicenter of Sweden’s property crisis. The company borrowed heavily during the cheap-money era to amas a portfolio of public-sector buildings, including schools, elderly care homes and residential buildings. Its debt burden has the company facing a funding shortfall of 8.1 billion kronor over the next 12 months.

“You could say it’s a bridge from banks, and then it will be a capital markets solution,” he said by phone.“This may be seen as positive for short-term bonds, but as the CEO acknowledges, further action is required. Though a review has ended, there may still be questions about revenue generation and SBB’s ability to support existing debt in the medium term.

The other two business units will comprise the community and residential portfolios. SBB said it would continue to explore opportunities to bring in equity partners that would hold a majority stake in its residential business by the end of next year, confirming an earlier report by Bloomberg News.

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Landlord SBB Gets $720 Million Cash Injection in Brookfield DealStruggling Swedish landlord SBB took a major step toward stabilizing its finances after agreeing to sell a further stake in a portfolio of school buildings to Canada’s Brookfield Asset Management Ltd.
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SBB shares up 37% on cash infusion, end of strategy reviewShares of Swedish property group SBB rose 37% in early trade on Monday after it announced on Sunday it would reorganise its business, securing an 8 billion crown ($719 million) cash boost and ending a strategic review. SBB, under pressure to cut its debt amid soaring interest rates, said in May it might sell all or parts of its business, but talks to divest its remaining 51% stake in education subsidiary EduCo later collapsed. SBB on Sunday said it had instead agreed to sell a 1.16% stake in EduCo to a unit of Canada's Brookfield Asset Management for 242 million crowns, and will also receive repayment of a 7.8 billion inter-company loan.
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