Serneke evaluates existing bond financing
On December 17, 2020, Serneke Group AB (“Serneke” or the “Company”) announced that it had secured the financing for Karlatornet, which will be the Nordic region’s tallest skyscraper, in a transaction with Fastighets AB Balder ("Balder") and a construction credit facility of approximately SEK 3 billion. In addition, Serneke has entered into a contract for the remaining project development and contract work at a fixed price of approximately SEK 3.2 billion. Occupation of Karlatornet is estimated to begin during the second half of 2023 and at completion Serneke will have received its invested capital of approximately SEK 1.5 billion together with the expected share of the profit from the project estimated to at least SEK 300 million.
To date, all the work has been conducted within budget, including constructing the complex foundation, and the costs for the remaining construction work are approximately 70 per cent agreed and fixed with suppliers and sub-contractors. In addition, Serneke has completed a rights issue of approximately SEK 122 million and a divestment of building rights to Balder that is expected to provide a liquidity effect of approximately SEK 250 million during 2021. Jointly, these transactions have contributed to a close to full reduction of the net debt for the Company, creating a strong position for Serneke to carry out the construction agreement in Karlatornet as well as other signed construction agreements.
The Company’s existing bond financing of SEK 700 million, maturing in December 2022, has a built-in refinancing period from March 1 to June 1, 2021 during which the bonds can be redeemed at the nominal amount. Following this period, the redemption price will be increased and the terms and conditions also stipulates a mandatory amortisation of SEK 200 million by June 2021, at the latest.
Based on the above and considering the importance of a strong cash position over the coming years, and for purposes of attaining a maturity profile that is aligned with the cash flows resulting from the completion of Karlatornet, Serneke has decided to evaluate its existing bond financing. For this purpose, the Company has assigned Carnegie Investment Bank AB and Nordea Bank Abp to explore a fixed income capital market transaction as a possible alternative in this evaluation.
For additional information, please contact:
Anders Düring, CFO Serneke Group AB
Telephone: +46 31 712 97 00
Johan Live, Head of Communications Serneke Group AB
Telephone: +46 768 68 11 37
Serneke is a growing corporate group active in contracting and project development. The Group was founded in 2002 and today has income of nearly SEK6.7billion and approximately 1,200 employees, organized into three business areas: Serneke Sweden, Serneke Invest and Serneke International. Through novel thinking, the Company drives development and creates more effective and more innovative solutions for responsible construction. The Company builds and develops housing, commercial buildings, industrial facilities, public buildings, roads and civil engineering projects, and other infrastructure. The company’s customers consist of both public and commercial clients. The Company’s Swedish units operate nationwide and are organized into five regions: South, West, East, Central and North, and are headquartered in Gothenburg. The Company’s Series B shares (SRNKE) have been listed on the Nasdaq Stockholm exchange since November 2016.
Further information about Serneke Group AB is available at www.serneke.group