Genova, which previously owns 50 percent of the shares in the property and project development company Järngrinden and has call options to acquire the remaining shares, has acquired an additional 1 percent of the shares in the company for SEK 13m from Patrik Ivarson, who consequently owns 49 percent of the company. Järngrinden will thus become a subsidiary and be consolidated in the Genova Group from and including closing on December 31, 2022.
In September 2021, Genova acquired 50 percent of the shares in Järngrinden as well as two options to acquire a further 50 percent of the shares within five and seven years respectively. Through Järngrinden, Genova has established itself as a relevant player in Western Sweden with a well-functioning platform with good conditions for continued growth in interesting growing cities such as Gothenburg, Borås, Kungsbacka, Varberg and Halmstad.
Since the acquisition and capital injection in 2021, Järngrinden has been able to increase the pace within, above all, the acquisition of investment properties with stable cash flows and clear development potential. Järngrinden has, in addition to continuing operations in project development, carried out a number of acquisitions of commercial properties with improvement potential. This has transformed Järngrinden into a company with a significantly larger share of investment properties than historically and thus larger balance sheet totals. Genova assesses that the change increases the need for transparency of holdings, which is achieved by consolidating Järngrinden, after Genova's acquisition of an additional 1 percent of the shares in Järngrinden, into the Genova Group.
For the Genova Group pro forma as of September 30, 2022, this means that the value of investment properties and projects increases by approximately SEK 1,000m to approximately SEK 10 billion and the annual rental value by approximately SEK 45m to approximately SEK 455m, while the loan-to-value ratio drops to approximately 55 percent and the interest-coverage ratio increases to 2.1 times. In addition, this acquisition emphasizes Genova's ambition to use its future options to acquire the remaining shares.
"We are happy that we with this acquisition can take the next step in our partnership and incorporate Järngrinden into the Genova Group as a subsidiary. Järngrinden has a stable and growing business with investment properties and profitable project development in Western Sweden, which aligns very well with Genova's strategy and ambitions. Our long-term plan is to use the options to also acquire the remaining part of Järngrinden", comments Michael Moschewitz, CEO of Genova.
"The deal that was carried out in September 2021 where Genova became owner of 50 percent of the shares in Järngrinden has meant that, despite the challenging times, we have been able to take advantage of the market situation even more and be active with acquisitions and development. The fact that I now own 49 percent in Järngrinden does not change anything, it is 'business as usual' and my entire commitment and focus is on Järngrinden like before. Me and my colleagues at Järngrinden are also very happy with having Genova as a partner in the company and therefore I did not want to prevent Genova from already consolidate Järngrinden as a subsidiary in order to make Järngrinden's values more transparent in their group,'' says Patrik Ivarson, co-owner and founder of Järngrinden.
About Järngrinden
Since 1981, Järngrinden has owned and developed modern properties in attractive locations in Western Sweden – mainly residential, but also tailor-made complete solutions for large-scale modern industry- and logistics buildings. Järngrinden wholly and partially owns a cash flow-generating property portfolio of approximately SEK 1,150m with a rental value of approximately SEK 70m and a project portfolio comprising approximately 132,000 square meters of floor space, distributed on nearly 2,150 residential building rights in various stages.
For further information, please contact:
CEO, Michael Moschewitz, mobile +46 (0)70-713 69 39, michael.moschewitz@genova.se
About Genova
Genova Property Group AB (publ) is a modern property company with a personal touch that owns, manages and develops properties with focus on Greater Stockholm area and Uppsala Region. On 30 September 2022, the value of the company's property portfolio amounted to approximately SEK 9.0 billion with a lettable area of approximately 299,700 sqm and the company held approximately 7,000 building rights for residential units. Genova's share has been listed on Nasdaq Stockholm since June 2020.
Genova – Smålandsgatan 12 – SE-111 46 Stockholm – www.genova.se