S&P welcomes SBB cash injection, but says more is needed

(Reuters) – Swedish real estate group SBB’s decision to secure fresh cash by cutting its stake in a subsidiary was a welcome move, although the company still needs more funds in the time ahead to meet obligations, ratings agency S&P said on Tuesday.

The planned cash injection, announced late on Sunday, will help the landlord repay short-term debt maturities and reduces “potential shortfall” in the next 12 months, S&P said in a statement.

SBB on Sunday said it had agreed to sell a 1.16% stake in its education unit to Canada’s Brookfield Asset Management for 242 million Swedish crowns ($22 million) and would also receive repayment of a 7.8 billion crowns loan.

“We … continue to believe that SBB remains dependent on disposing real estate assets or selling equity stakes and on raising new financing,” S&P said.

SBB on Monday told Reuters it was exploring a sale of a controlling stake in its residential real estate arm as part of a sweeping overhaul of operations.

SBB in a statement on Tuesday said it had agreed to sell two properties in Norway to a hospital tenant for 2.82 billion Norwegian crowns ($261 million), approximately 10% below the book value as of June 30.

($1 = 10.9968 Swedish crowns)

($1 = 10.7980 Norwegian crowns)

(Reporting by Greta Rosen Fondahn, editing by Terje Solsvik)