STOCKHOLM (Reuters) -Shares in Swedish property group SBB 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, 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)
