Fastator: Refinancing drawing nearer - ABG
NAVPS declined 5% q-o-q to SEK 20.2
Negotiations ongoing with bond investors
NAV discount of ~85% vs historical average of ~30%
Stable NIY in Point and slightly up in Företagsparken
In Q2'23, rental income and income from property management in Företagsparken were SEK 135m and SEK 92.1m, respectively, up 71% and 102% y-o-y. The equity position declined to SEK 3,023m vs. SEK 3,166m in Q1'23 due to negative property value changes. Earnings capacity in Point was flat q-o-q (net initial yield of ~5.0%) and declined 3% in Företagsparken (NIY increased by 0.2pp q-o-q to 6.1%). The value of Fastator’s holding in Studentbostäder, which is directly connected to its share price, fell by 40% q-o-q; in our updated model, we include a further negative value change of ~27%, or ~SEK 21m, in Q3'23.
In the midst of negotiations
Joachim Kuylenstierna retakes the helm as CEO (after stepping down in 2020), and the main focus is the upcoming refinancing of a SEK 500m unsecured bond (Stibor 3m + 650bps) with maturity 22 September 2023. Fastator initiated a written procedure on 22 August and communicated a SEK 955m sale of shares in Företagsparken on 30 August. Details are scarce, but SEK 677m or 71% of the amount will be paid as a promissory note with a term of four years, while the rest will be used to repay debt in underlying companies. The sale of shares in Företagsparken is conditional on approval of change of control and extension of outstanding debt, and negotiations with bondholders are currently ongoing.
Trading at a deep discount to NAV
We appreciate Fastator's focus on niche property segments and argue that investors get exposure to holdings with interesting long-term growth opportunities. That said, it comes with high leverage and clear refinancing risk. The share is currently trading at an ~85% discount to Q2'23 NAV vs. its historical average of ~30%. Fastator has grown its NAV per share by >10% every year since it was listed in 2015 (except for...
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Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/fastator/Equity-research/2023/9/fastator---refinancing-drawing-nearer/