(Reuters) -SBB said on Tuesday that one of its creditors had started legal proceedings against the Swedish property group for its failure to repay a bond.
The holdings of the bondholder represent about 46 million euros ($49.43 million), SBB said, adding that it may take around 18 months to reach a judgement.
U.S.
hedge fund Fir Tree Partners had told Reuters in November that it was accelerating its notes and starting proceedings against SBB for recovery of the debt.
SBB, which did not identify Fir Tree, said again on Tuesday it firmly rejects the allegation that it was in breach of a consolidated covenant ratio — a measure of a company’s ability to service its debt — set among the terms of that borrowing programme.
It also said it considers the acceleration notice received from this bondholder ineffective.
Fir Tree declined to comment on Reuters’ request.
SBB had in late May made several accounting adjustments to its first-quarter report, which some credit analysts suggested would have breached interest coverage requirements for the quarter without those changes.
The group is at the epicentre of a property crash that threatens to engulf the Swedish economy, having racked up vast debt by buying public property, including social housing, government offices, schools and hospitals.
($1 = 0.9306 euros)
(Reporting by Utkarsh Shetti in Bengaluru; Editing by Anil D’Silva and Shilpi Majumdar)
