Bli medlem
Bli medlem

Du är här

2017-02-02

Kungsleden AB: Kungsleden announces a fully underwritten rights issue of approximately SEK 1,600 million

Not for release, publication or distribution, directly or indirectly,
in or into Australia, Hong Kong, Japan, Canada, Singapore, the United
States or any other jurisdiction where such distribution of this
press release would be subject to legal restrictions.

The Board of Directors of Kungsleden AB (publ) ("Kungsleden" or the
"Company") has resolved, subject to the approval by an Extraordinary
General Meeting, to conduct a rights issue of approximately SEK 1,600
million with pre-emptive rights for Kungsleden's shareholders.

The rights issue in brief

· The rights issue is carried out in order to strengthen
Kungsleden's balance sheet and enable further profitable growth with
financial discipline through value-creating investments in the
Company's existing property portfolio and selective complementary
property acquisitions in accordance with the Company's strategy

· The rights issue is covered by subscription undertakings from
Kungsleden's largest private shareholders Gösta Welandson with
companies and Olle Florén with companies, corresponding to 17.2 per
cent of the rights issue. The remaining portion of the rights issue
is underwritten by Gösta Welandson with companies

· Final terms of the rights issue, including subscription price, are
expected to be announced on 1 March 2017

· Provided that the rights issue will be approved at the
Extraordinary General Meeting on 6 March 2017, the subscription
period will run from 10 March 2017 up to and including 24 March 2017

Gösta Welandson, largest shareholder in Kungsleden, comments:

"The Welandson family has been a shareholder of Kungsleden for several
years over which we have gradually increased our ownership position.
To us, this is a strategic and long-term holding. I am supportive of
both Kungsleden's new strategy and the transformation work that the
board and senior management have completed over these years. Looking
forward, we intend to keep our long-term ownership interest and we
support the board's proposal for a rights issue. As an expression of
our support, we have committed to subscribe for the new shares
pro-rata to our current shareholding and will underwrite the rights
issue. We see this as a step towards further strengthening
Kungsleden's financial position as well as securing the Company's
strategy and future".

Biljana Pehrsson, CEO of Kungsleden, comments:

"Today, Kungsleden is a high-quality property company which aims to
deliver attractive total returns to our shareholders and build
sustainable shareholder value. I am pleased that our main shareholder
Gösta Welandson has expressed his support for the strategy developed
by the board and management, and that he is willing to back the
proposed rights issue. The rights issue will strengthen the Company's
financial position and enables reduction of financial leverage.

Kungsleden will continue to refine its property portfolio and aims for
financially disciplined growth. We have identified a large number of
organic investment opportunities in the existing property portfolio,
resulting not least from strong new lettings in 2016. Furthermore, we
are continuously exploring selective and strategic add-on
acquisitions in our clusters, of which the acquisition of Emporia
Office in Hyllie in Malmö is a recent example".

Background and reasons
Over the past years, Kungsleden's property portfolio has become
geographically focused to a limited number of growth regions with
concentration in the office segment. Close to 80 per cent of the
portfolio is now located in Stockholm, Göteborg, Malmö and Västerås.
Offices comprise 65 per cent of the portfolio. In 2016, Kungsleden
launched a new business plan, Kungsleden 2020. Building on the
strategy that was introduced in 2013, the business plan is focused on
quality growth, optimization of the property portfolio and financial
stability in order to create attractive total returns for
Kungsleden's shareholders. As outlined in Kungsleden 2020, the target
is that earnings shall grow by increasing net operating income
generated by the existing properties as well as by growing the
portfolio through investments and selective acquisitions.

In accordance with Kungsleden 2020, the optimization of the property
portfolio will continue by divesting non-strategic properties around
the country and reinvesting in office properties in Swedish growth
regions. Value shall be realized today and going forward by divesting
potential residential building rights in the Company's portfolio.
Operationally, Kungsleden's strategy is to own properties in
clusters: selected areas with strong growth momentum and high
availability as well as a suitable mix of attractive properties. The
cluster strategy makes it possible to strengthen the customer
offering and achieve both asset as well as property management
synergies. Kungsleden's eleven clusters account for 62 per cent of
the property portfolio by value.

The main purpose of the rights issue is to strengthen the balance
sheet and enable further profitable growth with financial discipline.
The proceeds will be used for value-creating investments in the
Company's existing property portfolio. Strong new lettings in 2016
enable profitable investments in tenant improvements and
modernization. In addition, Kungsleden has a robust yielding pipeline
consisting of re-development, extension projects as well as new
construction. In total, the planned investments amount to SEK 2-3
billion for 2017-2019, enabling primarily higher rental income but
also reduced operating costs.

The new issue also allows for selective high-quality acquisition
opportunities in our core markets such as the recent acquisition of
Emporia Office in Hyllie (Malmö). An important feature is that the
rights issue makes it possible to reduce the financial risk of the
Company by increasing the equity ratio and decreasing the
loan-to-value ratio. Kungsleden's financial policy targets a
loan-to-value ratio in the interval of 50-60 per cent through the
cycle, with an average over time of 55 per cent. At this point in the
cycle, Kungsleden will be striving for a loan-to-value ratio in the
interval of 50-55 per cent.

In conclusion, it is the Board of Director's assessment that the
rights issue will improve Kungsleden's ability to create an
attractive total return with balanced risk profile for the Company's
shareholders.

Terms and conditions for the rights issue

Kungsleden's shareholders will have pre-emptive rights to subscribe
for new ordinary shares in proportion to their holdings. If not all
of the shares are subscribed for by exercise of subscription rights,
the Board of Directors shall, up to the maximum amount of the rights
issue, resolve on allotment of ordinary shares subscribed for without
the exercise of subscription rights where in such case, allotment
shall be made in the following order:

(a) Those who have subscribed for new ordinary shares by the exercise of subscription rights (irrespective of whether or not they were shareholders on the record date) pro rata in relation to the number of new ordinary shares subscribed for by exercise of subscription rights.

(b) Others who have notified the Company of their interest in subscribing for ordinary shares without the exercise of rights, pro rata in relation to such declared interest.

(c) Those who have made an underwriting commitment regarding subscription of new ordinary shares.

To the extent allotment according to the above cannot be made pro
rata, allotment shall be made by drawing of lots.

The record date at Euroclear Sweden AB for the right to participate in
the rights issue with preferential rights is 8 March 2017.

The size of the increase of the share capital, the number of ordinary
shares to be issued and the subscription price for the new shares are
expected to be published no later than 1 March 2017. The subscription
period is expected to run from 10 March 2017 up to and including 24
March 2017, or such later date as determined by the Board of
Directors. Trading in subscription rights is expected to occur from
10 March 2017 up to and including 22 March 2017.

The Board of Director's resolution on the rights issue is subject to
the approval of the Extraordinary General Meeting that is expected to
take place on 6 March 2017 at Kungsleden's premises on Warfvinges väg
31, Stockholm, Sweden. For more information, see the notice in a
separate press release.

Subscription undertakings and underwriting commitments

Gösta Welandson with companies and Olle Florén with companies, who
hold 14.2 per cent and 3.0 per cent of the shares in Kungsleden
respectively, have undertaken to subscribe for their respective pro
rata shares of the rights issue. Therefore, in total, 17.2 per cent
of the rights issue is covered by subscription undertakings.

The remaining portion of the rights issue is underwritten by Gösta
Welandson with companies, which means that the issue is secured in
its entirety. Kungsleden may seek to obtain additional subscription
undertakings from the Company's existing major shareholders, in which
case the underwriting commitment will be reduced accordingly.

The shareholders mentioned above have also committed to vote in favor
of the rights issue at the Extraordinary General Meeting.

Preliminary timetable

1 March Publication of the full terms of the rights issue, including the subscription price and the subscription ratio

6 March Extraordinary General Meeting for the approval of the Board of Director's resolution on the rights issue

6 March Last day of trading for Kungsleden's ordinary shares including the right to participate in the rights issue

7 March First day of trading for Kungsleden's ordinary shares excluding the right to participate in the rights issue

8 March Record date, i.e. ordinary shareholders registered in the share register on this day will receive subscription rights giving the right to participate in the rights issue

9 March Estimated date of publication of the prospectus

10-22 March Trading in subscription rights

10-24 March Subscription period

29 March Estimated date of publication of the preliminary result of the rights issue

31 March Estimated date of publication of the final result of the rights issue

Financial and legal advisors

ABG Sundal Collier, Kempen & Co and SEB Corporate Finance are acting
as Joint Global Coordinators and Joint Bookrunners in the
contemplated rights issue. Mannheimer Swartling Advokatbyrå is legal
advisor to Kungsleden.

For more information, please contact

Biljana Pehrsson, CEO of Kungsleden | +46 706 90 65 60 |
biljana.pehrsson@kungsleden.se

Anders Kvist, Deputy CEO and CFO of Kungsleden | +46 706 90 65 63 |

Författare WKR

Tala om vad ni tycker

Tala om vad ni tycker

Ni är just nu inne på en betaversion av nya aktiespararna. Lämna gärna feedback på vad ni tycker i formuläret nedan.