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Finance

SBB bondholder drops lawsuit against the property group

Published by Global Banking and Finance Review

Posted on January 13, 2025

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STOCKHOLM (Reuters) - Sweden's SBB said on Monday it had learned that one of its creditors, U.S. hedge fund Fir Tree Partners, will end remaining legal proceedings against the real estate group, boosting its share price.

Fir Tree has since 2023 sought immediate debt repayment from SBB, citing what it said was a breach of a bond clause, a claim rejected by the Swedish group.

SBB's share price rose 5.8% by 1210 GMT on Monday.

Fir Tree did not immediately respond to a request for comment.

Built on a public property buying spree that included social housing, government offices, schools and hospitals, SBB stood at the centre of a Swedish real estate bubble that unravelled from 2022 to 2023 when inflation and interest rates soared.

Fir Tree earlier this month, through two of its funds, dropped two other claims, SBB said.

Fir Tree entities at one point held 46 million euros in notes subject to the proceedings, although only 7.5 million euros ($7.67 million) remained in the final lawsuit, according to SBB.

"We can now put this behind us and devote all our time to the business and to preparing SBB for the future," the company's CEO Leiv Synnes said in an emailed comment to Reuters.

SBB last month won approval from a majority of creditors to restructure key parts of its bonds, giving the group greater flexibility to divest property and to reduce its overall debt, management said at the time.

Fir Tree's decision removes some of the short-term liquidity problems for SBB, Carlsquare analyst Bertil Nilsson said.

"That said, SBB still has short-term debt to be refinanced in 2025 that significantly exceeds current cash, so that will obviously have to be resolved before it can fully exhale," Nilsson said.

($1 = 0.9775 euros)

(Reporting by Marie Mannes, Greta Rosen Fondahn, writing by Louise Breusch Rasmussen, editing by Stine Jacobsen, Terje Solsvik and Sharon Singleton)