Not 45 Important events after the balance sheet date

Extra distribution of real estate company

In addition to the ordinary dividend, in February 2020 Peab’s Board proposed an extra distribution of all the shares in a newly formed company, Annehem Fastigheter, holding Peab’s wholly owned, fully developed commercial properties. As a result of the spread of the Coronavirus and its effects on external circumstances and financial markets Peab’s Board decided on March 24, 2020 to withdraw the proposal to the Annual General Meeting concerning an extra distribution of all the shares in Annehem Fastigheter. With the uncertain situation in the world this is not the right time to list the company. Peab continues to believe that a distribution of the properties is the solution that will over time provide shareholders with the greatest value. Therefore the operative work of building and structuring the real estate company is continuing as planned. The Board intends to summon an extraordinary General Meeting to decide on distribution of the real estate company when the situation has stabilized and conditions are more favorable.

Annehem Fastigheter manages and develops centrally located, high quality commercial, community and residential property with a clear environmental profile in the Nordic growth areas Stockholm, Skåne/Göteborg as well as Helsinki and Oslo. Annehem Fastigheter builds lasting relationships and value through management close to customers. Initially Annehem Fastigheter owns fully developed properties with a total market value of around SEK 3,000 million. In addition, 50 percent ownership in two joint venture companies – Nya Bara Utvecklings AB and Point Hyllie Holding AB – is included. Annehem Fastigheter has also signed a contract with Peab to acquire three properties located in Solna, Oslo and Helsingborg respectively, which will be taken over after they are completed.

When the conditions are right the Board intends to summon an extraordinary General Meeting to propose an extra distribution of all the shares in Annehem Fastigheter to existing shareholders according to Lex Asea. Peab’s shareholders will then receive shares in Annehem Fastigheter in addition to their existing stake in Peab.

The distribution is conditional on the consent of Peab’s lenders and that Annehem Fastigheter receives financing on market terms. The level of equity and pledges in Annehem Fastigheter will be decided in consultation with the financing banks.

When Annehem Fastigheter is distributed the difference between market values and book values as well as eliminated construction contract profit will be taken up as income in Peab’s consolidated accounts. In February 2020 this amounted preliminarily to around SEK 1,200 million, which primarily corresponds to the reduction in equity in the Group caused by the extra distribution. The effect on profit will be updated in connection with the future distribution decision based on circumstances at the time.

Further information see Board of Directors’ report, section Other information and appropriation of profits, chapter Important events after the end of the year.

Coronavirus

In the beginning of 2020 the coronavirus spread to a large part of the world. At the time of writing this, countries are putting different measures into effect on short notice to limit the spread of the infection, for example entry and quarantine regulations. Stock markets all over the world have plunged during March. Governments and central banks are introducing different forms of crisis packages to mitigate the economic effects. This will affect the global economy but how profound and how lasting the effects will be is difficult to say.

Peab is a major employer with many employees and many people at our workplaces. Our first and foremost mission is to keep our business running but we are monitoring developments and follow recommendations by the authorities in respective countries concerning the spread of the coronavirus and we adopt accordingly. The short-​term effects of the Coronavirus on Peab’s business are limited but how we will be affected in the long run as well as the economic consequences of the Coronavirus pandemic cannot be foreseen at the time of publishing this year’s Annual Report.

Acquisition of YIT’s paving and mineral aggregates operations

On July 4, 2019 Peab signed a con­tract to ac­quire YIT’s paving and min­er­al ag­gre­gates op­er­a­tions in the Nor­dic re­gion. The trans­ac­tio­n was con­di­tion­al on ap­proval from com­pe­ti­tion au­thor­i­ties as well as the ful­fill­ment of cer­tain con­trac­tu­al con­di­tions. At the end of March 2020 the tranas­ac­tion was ap­proved by the com­pe­ti­tion au­thor­i­ties. The take over took place on April 1, 2020.

For fur­ther in­for­ma­tion see Board of Di­rec­tors’ re­port the sec­tion Im­por­tant events dur­ing the year under Other in­for­ma­tion and ap­pro­pri­a­tion of prof­it.