The boards of ALM Equity AB (publ) (OM:ALM) ("ALM Equity") and Svenska Nyttobostäder AB (publ) (OM:NYTTO) ("Svenska Nyttobostäder") have proposed a merger of the companies. The aim is to maximize the value of existing assets in Svenska Nyttobostäder and free up liquidity for continued growth. In a dynamic real estate market where change is the only constant, ALM Equity believes that the merged company will be a stronger company and that the merger creates better opportunities to be more aggressive.

Clearer focus on development and expansion of own operations. After, in recent years, having restructured large parts of the operations within ALM Småa Bostad into holdings in associated companies, the merger means that ALM Equity now directs its focus towards developing and expanding the company's own operations at the same time as operating cash flows are generated. After the merger, the newALM Equity will own its own portfolio of a total of approximately 3,300 investment homes, which are either completed or close to completion, and from Svenska Nyttobostäder approximately 2,100 building rights are supplied that are ready for the start of production.

ALM Equity will build and develop the building rights portfolio at the same time as the supplementary management activities are made more efficient. This creates a good balance between ongoing cash flows from management and transaction flows from property development. The intention with the holdings in Klövern and Aros Bostad is to keep them as long as ALM Equity judges that the company can create added value in the holdings.

Plan for development of the assets. ALM Equity's intention for the assets in Svenska Nyttobostäder is to reduce the management portfolio to nearly 2,300 homes by selling just over 1,000 homes as condominiums. The sales value is estimated to amount to approximately SEK 3.2 billion with a debt of approximately SEK 1.9 billion. The divestiture is intended to be carried out over a three-year period and is estimated to have a liquidity effect of approximately SEK 1.3 billion and a positive profit effect of approximately SEK 0.4 billion.

The building rights portfolio is intended to be developed to be sold externally as condominiums or management properties. The sales value is estimated to amount to approximately SEK 6.3 billion and is expected over time to be able to free up liquidfunds of approximately SEK 2.3 billion and to have a positive profit effect of approximately SEK 1.1 billion. The development of the building rights portfolio is planned to take place over a six-year period.

The total net liquidity effect of these measures is estimated to amount to approximately SEK 3.6 billion after amortization of debts of approximately SEK 2.0 billion. The surplus is intended to be used to repay debts or invest in new and remaining assets. "There is already a basic plan for each asset in Svenska Nyttobostäder's portfolio that we are prepared to work hard to realize.

If fully implemented, we estimate that our action plan for the various parts can create values of a total of approximately SEK 5 billion over time. Put in relation to the number of ordinary shares in ALM Equity after the merger, it means that our assessment is that the addition of Svenska Nyttobostäder's assets to ALM Equity can over time create shareholder value of around SEK 300 per ordinary share in newALM Equity," says Maria Wideroth, Chairman of the Board of ALM Equity.