(Bloomberg) -- The man tasked with turning around the troubled landlord at the center of Sweden’s property crisis has pledged not to sell off the company’s assets at a discount, anticipating that there will be “plenty of interested parties.”
Last week saw the board of Samhallsbyggnadsbolaget i Norden AB — or SBB, as it is more commonly known — appoint Leiv Synnes, 52, to the helm of the Stockholm-based company. He had previously been the chief financial officer of Akelius Residential Property AB, owned by Swedish property mogul Roger Akelius.
“I enjoy challenges. During my two decades in the real estate sector I’ve always taken on roles that make me grow,” Synnes said by phone.
The 19-year industry veteran, who has only ever worked at Akelius, has a daunting task in restoring investor confidence in SBB. The embattled landlord urgently needs to find cash in light of its slumping share price, triggered by a downgrade to junk status in May. SBB has already scrapped a dividend and a planned issuance of shares, but faced with an $8 billion debt pile and surging interest costs, time is running low to stabilize its finances.
“My main focus while getting started will be to work with the strategic review initiated by the board, evaluating the possibilities of selling the entire company — or parts of it,” Synnes said.
He cautioned that it was too early for him to comment on the likelihood of a full sale, emphasizing, “it’s my first day on the job.”
Analysts believe that a full sale is unlikely, expecting that buyer interest will instead be focused on assets such as SBB’s elder care homes and residential units. On Friday, Bloomberg News reported that Brookfield Asset Management was in early talks with the landlord.
“My assessment is that there will be plenty of interested parties,” Synnes said, regarding potential buyers of SBB’s assets. “We will sell properties at market value — we will not sell any assets at a discount.”
SBB shares surged 53% Friday following Bloomberg’s report of Brookfield’s interest and the announcement that Leiv Synnes would succeed Ilija Batljan as CEO. Shares rose 3.9% around 11 a.m. CET on Monday.
Over the next three years, SBB must roll over $1.6 billion of maturing bonds, making it a trial balloon for what might happen to European property companies that borrowed heavily during the era of easy money. Despite flagging investor confidence, Synnes said he’s confident in his ability to solve such challenges.
“SBB has plenty of strong cards to play. It has stable properties, it has access to share capital, and it’s established on the capital market. We have a lot of tools to handle the current situation.”
Given Synnes’ background and his close ties to Roger Akelius, speculation has been rampant that the move is part of a power play by the property mogul.
The new CEO did not comment directly on whether that might be in his plans. “I’m business-focused in everything that I do. My job is to create value for SBB’s shareholders. It’s too early to say whether that includes transactions with Akelius or not,” Synnes said.
(Corrects Synnes title in deck, adds context about share price in 9th in graf)
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