Borgestad ASA ("Borgestad", "the Group" or "the Company") announced on October 7, 2026, that its indirect subsidiary Höganäs Bjuf Fastighets AB ("HBF") has entered into a share purchase agreement with Bjuv municipality for the sale and leaseback of the two properties in Bjuv, Sweden, where Höganäs Borgestad's production plant and other refractory production facilities are located. The signing follows the Supreme Administrative Court's decision on September 1, 2026, not to grant leave to appeal, which rendered Bjuv municipality's approval of the transaction final and binding and thereby satisfied the condition on which the conditional agreement from October 2023 depended. The properties will be transferred to a newly incorporated, wholly owned subsidiary of HBF prior to completion, with Bjuv municipality acquiring the properties through the shares in that entity. The Group will lease the production facilities back and continue production in line with previous practice. Completion is subject to customary closing conditions and is expected during October 2026.
The properties are valued at SEK 145m in the transaction, with a purchase price of approximately SEK 139m after adjustment for stamp duty of approximately SEK 6m, resulting in a net cash effect for the Group of approximately SEK 139m. The purchase price is settled in cash in three instalments: 60% upon completion, 20% after 12 months and 20% after 24 months. The accounting gain, recognized upon completion, is estimated at approximately SEK 102m. Höganäs Borgestad has agreed with Nordea that SEK 10m of the net proceeds will be used to reduce interest-bearing debt. The leaseback comprises 52,484 sqm in the first year, decreasing to 35,234 sqm two years after completion. No rent is payable for the first 24 months, after which an annual rent of SEK 200 per sqm applies, with a maximum lease term of five years and a unilateral right for HBF to terminate at six months' notice. The Group has furthermore been granted an option to acquire a separate 30,000 sqm property in the municipality at SEK 150 per sqm.
In summary, Analyst Group considers the signing of the Bjuv sale-leaseback agreement to be a major event for Borgestad, both financially and operationally. The transaction releases approximately SEK 139m in cash, corresponding to roughly a third of the Group's net interest-bearing debt at the end of Q2-26, of which SEK 10m is allocated to debt reduction, leaving the large majority available for distribution upward through the structure, in line with the Company's communicated intention. At the same time, the leaseback terms enable production to be consolidated into a materially smaller facility with no rent payable for the first 24 months, which adds a company-controlled lever toward the refractory segment's margin target of at least 10%. The terms are better than Analyst Group had expected on both dimensions, with a materially lower debt repayment than previously indicated and a rent-free transition period that was not part of our assumptions. As the transaction has not been included in our estimates, Analyst Group considers the announcement to represent clear upside relative to our published forecasts and, in our view, motivates a higher valuation of Borgestad's shares.
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