D. Carnegie & Co has entered into an agreement regarding repayment of convertible subordinated loans - Reduces dilution and improves financial net
In order to preven dilution of shares due to conversion of convertible subordinated loans in D. Carnegie & Co AB (publ) (the ”Company”) – listed on Nasdaq Stockholm – the Company has entered into a repayment agreement (the “Agreement”) with the creditor, Svensk Bolig Holding AB (“SBH”), on repayment of the subordinated loans. The Company will also pay SBH a market-based compensation for the value of the option. As part of the financing of the repayment, the Company will convene an extraordinary general meeting to authorize an issue of new.
In the Company’s acquisition of all the shares in Hyresbostäder i Sverige II AB from SBH in July 2014, the purchase price was partly paid by way of issuing three convertible subordinated loans each amounting to MSEK 340, which upon full conversion correspond to 16 266 230 shares or approximately 19 per cent of the total number of outstanding shares.
– By repaying the subordinated loans we will prevent the dilution of current shareholders, which would otherwise arise from the conversion of the subordinated loans, says Ulf Nilsson, CEO of D. Carnegie & Co, and continues:
– Moreover, by issuing new shares, we can improve our equity ratio and financial net.
Pursuant to the Agreement, repayment shall be made in cash on 1 July 2016. SBH will also receive compensation for the option value of the convertible bonds of approximately SEK 137 million, which the parties consider to be market-based. The Company intends to finance the repayment by, inter alia, an issue of new shares and a bond issue. The earning capacity of the Company is estimated to increase with approximately MSEK 25 annually due to reduced interest costs if financing can be implemented as planned.
In accordance with the above, the Company will convenes an extraordinary general meeting with a proposal to the general meeting to authorize the board of directors to resolve on a directed issue of Class B shares to new investors of up to 10 per cent of the total number of outstanding shares. The purpose of the authorization is to enable the planned repayment of the Subordinated Loans. The major shareholders of the Company, Kvalitena, will support this decision
For further information, please contact:
Ulf Nilsson, CEO, D. Carnegie & Co
+46 (0)8 121 317 25
About D. Carnegie & Co
D. Carnegie & Co is a property company focusing on residential properties in the Greater Stockholm region and other growth areas. The company’s business concept is to own property portfolios slated for a gradual renovation of apartments in conjunction with the natural turnover of tenants. This can take place quickly and cost-efficiently thanks to extensive experience from the Bosystem renovation method which, among other things, means that no evacuation needs to take place. In addition to this, the company creates value through the development of building rights in existing portfolios. The market value of the company’s properties amounted to MSEK 13 600 on 1 December 2015. The total rental value amounted to MSEK 1 292 on 30 September 2015 annually. The economic occupancy rate is high – vacancies are virtually non-existent. D. Carnegie & Co is listed on Nasdaq Stockholm.
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