Veidekke Bostad AB acquires development option for 800 homes in Sweden from Bouwfonds Property Development. This acquisition strengthens Veidekke's presence in Sweden, particularly in housing development in the Stockholm region. "We envision a major potential for Veidekke in housing development and housing production in Sweden's three major city regions, and the acquisition of this site portfolio is a part of this effort," says Arne Giske, Executive Vice President of Property Scandinavia.
Dutch company Bouwfonds Property Development, one of Europe's leading property developers, has decided to concentrate operations in the Netherlands, France and Germany and has therefore approached Veidekke with an offer to buy its 50% share in Bouwfonds Veidekke AB. This company was established in 2005, and by way of a management agreement Veidekke Bostad has been responsible for project acquisition, development, implementation and administration. As of 1 June Veidekke will be sole owner of the company.
Veidekke Bostad will pay NOK 250 million for the shares, whereof NOK 140 million is paid only upon approved zoning of one of the major projects. Upon consolidation of the entire company, Veidekke's balance will increase by approx. NOK 800 million, primarily financed through sales credits. The acquisition entails that Veidekke's original share is valued at real value, i.e. approx. NOK 250 million (cf. IFRS 3), and the transaction thus provides a positive effect on earnings of approx. NOK 140 million in Q2 2011.
Bouwfonds Veidekke AB was, as mentioned, founded in 2005 in cooperation with Dutch company Bouwfonds, and has since its inception been owned 50/50 by Bouwfonds and Veidekke Bostad. The company has a project portfolio of 1,600 building rights for homes, 1,400 in the Stockholm region and 200 in Gothenburg. Among the 1,400 in Stockholm, there are 350 building rights on Östermalm, a project being carried out in cooperation with Akademiska Hus for the building of Kungliga Musikhögskolan. There are a further 350 building rights in central Stockholm, in addition to 700 in Stockholm suburbs. These include 100 building rights currently under production in Sollentuna. The portfolio also includes 550 building rights related to options.
"The entire portfolio will provide turnover of approx. NOK 6 billion, in addition to major contracts for Veidekke for the next five to seven years. The company's portfolio thus provides good potential for earnings in the years ahead," says Per-Martin Eriksson, managing director of Veidekke Bostad AB.
For further information please contact:
Arne Giske, Executive Vice President, Property Scandinavia, mobile +47 905 89 526, arne.giske@veidekke.no
Jørgen Wiese Porsmyr, Executive Vice President and CFO, mobile +47 907 59 058,
jorgen.wiese-porsmyr@veidekke.no
Jørgen Michelet, Senior Vice President Finance/IR, mobile +47 917 43 856, jorgen.michelet@veidekke.no
Veidekke is one of Scandinavia's largest contractors with 6,100 employees and revenues of NOK 16.3 billion (2010). Activities include building and construction projects, residential developments, asphalt plants, gravel and aggregates, road maintenance and recycling. Our values are to be professional, honest, enthusiastic and pioneering. Our goals for health and safety and the environment are as important to us as our financial goals. Veidekke is characterised by a decentralised organisational model with a strong corporate culture and a high degree of employee involvement. Over half the employees are co-owners, holding almost 20% of Veidekke's shares between them. The company is listed on the Oslo Stock Exchange and has never declared a loss since it was founded in 1936.
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