The Board of Hemfosa Fastigheter has decided to propose that an Extraordinary General Meeting of Hemfosa on September 13, 2018 resolve to distribute all of the shares in the wholly owned subsidiary Nyfosa, which comprises the company’s portfolio of commercial property. The purpose of having two independent and specialized companies is to create better conditions for leveraging the potential of the entire business and thus increase shareholder value. After a decision on the distribution has been made, Nyfosa’s shares will be distributed to Hemfosa’s ordinary shareholders and listed on Nasdaq Stockholm in the fourth quarter of 2018. More detailed information for shareholders about the proposed distribution has been published today in an information brochure available on Hemfosa’s website.
Since it was founded in 2009, Hemfosa has generated a significant property portfolio with a growing share of community service properties with stable long-term cash flows. During the same period, Hemfosa has built up a strong portfolio of attractive commercial properties with favorable earnings that are now concentrated to the subsidiary Nyfosa.
In November 2017, the Board of Hemfosa delegated to the senior executives the task of analyzing the conditions for splitting the Group into two listed companies: one company to specialize in community service properties and one transaction-based, opportunistic company. Based on this analysis, the Board believes that a demerger of Hemfosa and a separate listing of Nyfosa will create better conditions for growth and for capitalising on business opportunities in both the commercial property market and in the market for community service properties.
“Demerging the Group into two listed companies is the next logical step for Hemfosa, providing scope for each operational area to independently enhance their competitiveness, create additional drive and efficiency in the organisation and strengthen the opportunities for growth. Two strong, specialized companies will have optimal conditions for creating value for all of our stakeholders,” says Bengt Kjell, Chairman of the Board of Hemfosa.
Nyfosa is a transaction-based and opportunistic property company in which business activities are in focus. The company’s business concept is based on active participation in the Swedish transaction market combined with an investment strategy that can be flexible to the property market, meaning it is not limited by property category, region, scope of the transaction nor holding period. This investment strategy, an efficient and near-to-market organisation with documented transaction know-how and experience from assessing and evaluating risks provides Nyfosa with a solid foundation for making value-creating investments, thus creating a property portfolio that generates high and stable returns.
As per June 30, 2018, the value of Nyfosa’s property portfolio corresponded to SEK 12.4 billion, with a leasable area of 1,130 thousand sqm and mainly comprised offices in high-growth municipalities as well as logistics and warehouse properties located at transportation hubs across Sweden.
Nyfosa’s objectives, financial risk limitations and dividend policy
Nyfosa’s Board of Directors has adopted the following financial objectives, risk limitations and dividend policy for Nyfosa.
- Generate long-term high and stable return with a focus on growth.
Growth and profitability targets
- Annual growth in earnings and the property portfolio of at least 20 percent up to a total property value of SEK 25 billion (excluding shares in joint ventures).
- At least 15 percent return on equity over time, before paid tax.
Financial risk limitations
- Long term, the equity/assets ratio is to amount to at least 25 percent.
- The loan-to-value ratio should not exceed 65 percent.
- The interest-coverage ratio should not fall below a multiple of two.
- Profits generated will be reinvested to leverage business opportunities and achieve the growth target of a total property value of SEK 25 billion, after which the distributable profit primarily is intended to be paid to shareholders in the form of a dividend, redemption and/or repurchase of shares.
Hemfosa excluding Nyfosa
As per June 30, 2018, Hemfosa excluding Nyfosa had a property portfolio of community service properties with a value of SEK 33.9 billion, with tenants comprising schools, public authorities, the judicial system and health and care services in Sweden, Norway and Finland.
The financial objectives and dividend policy of Hemfosa will be reviewed by the company’s Board of Directors and senior executives and adapted to the company’s operations following the demerger and the distribution of all shares in Nyfosa.
Extraordinary General Meeting
An Extraordinary General Meeting of Hemfosa will be held on Thursday, September 13 at 4:00 p.m. at Advokatfirman Cederquist’s premises in Stockholm, Sweden, to address the Board’s distribution proposal. Refer also to the separate press release that presents the notice of the Extraordinary General Meeting.
For further information, please contact:
Jens Engwall, CEO, [email protected], mobile +46 70 690 65 50, office +46 8 448 04 80
Bengt Kjell, Chairman of the Board, mobile +46 70 594 53 98