Analysis - Fall from grace: How the property crash unravelled Sweden's SBB
By Marie Mannes, John O'Donnell and Chiara Elisei
STOCKHOLM/LONDON/FRANKFURT (Reuters) — For hundreds of thousands of ordinary Swedes, investing in one of their country's biggest landlords SBB (ST:SBBb) was a sure bet for years. Now it is at the epicentre of a property crash that threatens to engulf the Nordic state's economy.
On Friday, the heavily-indebted property group will offer investors a glimpse of its finances in its second-quarter results and enthusiasm for the one-time rising star has been displaced by a sense of foreboding.
SBB is scrambling to salvage its finances after recently seeing its credit rating downgraded to junk. Its shares have lost over 90% of their value since peaking in 2021.
Maria De Geer of the Swedish Shareholders Association said the company's shares had once been so popular among Swedes it became known as a stock for the people, snapped up by roughly 300,000 small investors.
«All those people… thought they would become millionaires,» she said.
«There are still lots and lots of small shareholders who've had a massive loss as they bought… at the peak and they are now with something more or less worthless.»
Those investors bought into a strong track record of growth, stable dividends and a credit rating to be proud of.
But the company, founded by a former social democrat politician Ilija Batljan, built up vast debts buying public property including social housing, government offices, schools and hospitals.
Hit by soaring interest rates, it was forced to cancel its dividend and scrap a share issue. SBB has said it is now hunting for a buyer of all or parts of its business after Batljan was forced to step down.
SBB's problems are unfolding as Sweden struggles to contain a wider property crisis.
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