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The ambitions were great when Storm Real Estate, which invests in Russian office buildings, went public in 2010. In recent years, Storm has been very quiet.
The company, in which investor Morten E. Astrup is the largest shareholder, has received a series of downtime agreements from its Swedbank banking connection and was priced at less than NOK 50 million on Tuesday morning.
The small real estate company is now merging with three Trønder families through a so-called reverse acquisition with KMC Properties in a transaction of just over one billion kronor.
The Witzøe family becomes large owners
KMC Properties owns 51 percent of EBE Eiendom, which is controlled by the Bekken and Thoresen families, and 47 percent of Kverva Industrier from the Witzøe family. All three families are based in Trøndelag.
The Bekken family is behind fish packaging and box maker Bewi, which went public in August. The Thoresen family owns the investment company Abra Norge and the Witzøe family has decided to grow salmon through Salmar.
To complete the reverse acquisition, new shares corresponding to the purchase price of just over a billion will be issued.
The current and Thoresen-controlled EBE will own approximately 35.7 percent of the Storm shares, while the Witzøe family will own 32.9 percent before a share issue.
Astrup, along with the other major shareholders, will also assume Storm’s outstanding debt to Swedbank of NOK 187 million. This will be converted into stocks.
You will then hold about 6 to 7 percent of the new company, which corresponds to NOK 100 million, given that the new share issue and conversion will take place at a price of NOK 7 per share as planned.
Investor Morten Astrup. (Photo: Per Ståle Bugjerde)
– It’s been a challenging period for Storm, but we’ve always believed that it was possible to do an industrial deal with an environment that has complementary expertise, says Astrup.
He refuses to let Storm be used as a dead stock shell.
– KMC does not take care of a dead stock market shell. Based on the new money I put into this, it should be said that it has been a point for KMC to establish a partnership with us, Astrup says.
You want a replacement machine
KMC Properties has 39 industrial properties in the Nordic region and the Netherlands with a total value of approximately NOK 3 billion.
On the client side, you’ll find insula controlled by Bewi and Witzøe, which are the largest and second-largest tenants, respectively.
– What has appealed to me a lot is that this portfolio of 39 properties is geographically distributed and serves strong clients and brands throughout the Nordic region, such as Lofoten Cod, Volvo and Skanska, says Astrup.
– With an average lease term of 11 years in the deals, everything should be in place for this to be a safe dividend machine, which is a good platform to grow, he says.
I will get money
As part of the transaction, Storm will raise fresh money through a so-called NOK 300 million private placement to which both existing shareholders and new investors are invited. NOK 1.85 billion will also be raised on the loan market, through a secured bond loan.
The money will be used, among other things, to pay off bank debt and finance the acquisition of four properties in the Netherlands, as well as one property some distance from Trondheim.
– We have discussed several possible alternatives. We have growth ambitions, and going public to gain access to the capital opportunities it provides, and the seriousness it brings to going public, made us think it was better to go public, says Liv Malvik, CEO of KMC Properties .
KMC also denies that they are buying a shell to go public.
“We’re not exactly a real estate company buying a pharmaceutical company,” says Charlotte Knudsen, investor contact at KMC.
They believe it was an equally important part of the agreement to bring Astrup to the team.
– We believe it was important to have access to Morten Astrup’s financial and real estate expertise and knowledge, says Malvik.
Russia exists
Storm Real Estate already has only one asset, an office building in Moscow: the Gasfield building.
Will continue.
– Russia ownership will now be a potent option that is a small part of a large portfolio that is 97 percent leased as of today divided into 80 different contracts, Astrup says.(Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases via a link, which leads directly to our pages. Copying or other use of all or part of the content may only be done with written permission or as permitted by law. For more terms, see here.
