HALMSLÄTTEN Fastighets AB

Transcription

1 Company Description HALMSLÄTTEN Fastighets AB Published as a part of Halmslätten Fastighets AB (publ) s application for listingon Spotlight Spotlight Spotlight is a subsidiary of ATS Finans AB, a securities company under the supervision of the Swedish Financial Supervisory Authority. Spotlight runs an MTF platform. Companies that are listed on Spotlight have undertaken to adhere to Spotlight s listing agreement. Among other things, the agreement is intended to ensure that shareholders and other actors in the market receive correct, immediate and concurrent information on all circumstances that may affect the Company s share price. Trading on Spotlight takes place in an electronic trading system that is accessible to the banks and stockbrokers that are affiliated with the Nordic Growth Market ( NGM ). This means that those who want to buy and sell shares that are listed on Spotlight can use most banks or stockbrokers. The listing agreement and share prices can be found on Spotlight s website ( Manager: This Company Description is dated 17 January 2019

2 IMPORTANT INFORMATION This company description with appendices (jointly referred to as the "Company Description") has been prepared in order to provide information about Halmslätten Fastighets AB (publ), corporate identification number , (the "Company") and its business in connection with the listing of the Company's shares on Spotlight. Pareto Securities AB, corporate identification number (the Manager or Pareto ) has been engaged as the Company s financial advisor. This Company Description has been prepared by the Company and is not approved by or registered with the Swedish Financial Supervisory Authority (Sw. Finansinspektionen). This Company Description has been reviewed and approved by Spotlight. See section 1 (List of Definitions) for an explanation of words and terms used throughout the Company Description. Sources and disclaimer of liability The information in the Company Description has been prepared to the best of our judgement and reasonable steps have been taken to ensure that information included in the Company Description is not incorrect in any material respect and does not entail any material omissions that can be expected to affect the meaning of its contents. The information includes industry market data in the public domain, as well as estimates obtained from several third-party sources, including from the Vendor (as defined below), the Vendor s subsidiaries and industry publications. The Manager believes that its industry data is accurate and that its estimates and assumptions are reasonable, but there can be no assurance as to the accuracy or completeness of the Vendor s data. Financial information in this Company Description has not been audited and/or reviewed by auditors unless otherwise stated. Pareto disclaims, to the extent permissible under applicable legislation, any liability for any loss as the result of any of the information given being misleading, incorrect or incomplete, as well as for any loss otherwise incurred as the result of an investment in the Company. The Company Description includes forward-looking information and statements relating to the activities, financial position and earnings of the Company and/or the industry in which the Company operates. The forward-looking statements include assumptions, estimates and expectations on the part of the Company and the Manager and are based mainly on information provided by the Vendor, or reasonable assumptions based on information available to the Manager. Such forward-looking information and statements reflect current views with respect to future events and are subject to risks and uncertainties that may cause actual events to differ materially from any anticipated development, with the implication that final earnings or developments on the part of the Company may deviate materially from the estimates presented herein. Neither Pareto nor the Company can guarantee the correctness or quality of the suppositions underpinning any assumptions, estimates and expectations, nor can they accept any liability in relation to whether any assumptions, estimates and expectations are actually correct or realised. All investors will need to perform their own independent assessment of such estimates/expectations, and all investors must themselves verify the assumptions which form the basis for the forward-looking statements. Neither the Company, nor Pareto can give any assurance as to the correctness of such information and statements or the correctness of the assumptions on which such information and statements are based. The information included in the Company Description cannot be used for any other purpose than the assessment of an investment in the Shares in the Company. The contents of the Company Description shall not be construed as legal advice, investment advice or tax advice. All investors are encouraged to seek such advice from their own advisors. Services provided by Pareto 2

3 that has been engaged as the Company s financial advisor does not render and shall not be deemed to render any advice or recommendations as to an investment in Shares. Governing law and dispute resolution This Company Description is subject to Swedish law. Any disputes regarding this Company Description which cannot be solved amicably, shall be referred to the ordinary courts of Sweden and the applicant accepts the non-exclusive jurisdiction of the Stockholm District Court. 3

4 CONTENTS 1 LIST OF DEFINITIONS RESPONSIBILITY STATEMENT INVESTMENT SUMMARY SUMMARY OF THE COMPANY, THE TENANT AND THE PORTFOLIO SUMMARY OF FINANCIAL INFORMATION SUMMARY OF THE RECENT EQUITY ISSUE RISK FACTORS LIMITED OR NO SUBSTANTIAL OPERATING HISTORY MARKET RISK TRANSACTION RISK OPERATIONAL RISK COUNTERPARTY RISK RISKS RELATED TO THE BUILDINGS RISK RELATED TO PREVIOUS CONSTRUCTION WORKS RISKS RELATED TO RENTAL INCOME RISK RELATING TO UNFORESEEN COSTS REGARDING THE PROPERTIES INCREASED MAINTENANCE COSTS RISK RELATING TO ENCUMBRANCES ON THE PROPERTIES RISK RELATING TO TAX ON ADVERTISING FINANCING RISK REFINANCING RISK COMPLIANCE WITH FINANCING AGREEMENTS GEOGRAPHIC RISK MANAGEMENT RISK PROPERTY RISK ENVIRONMENTAL AND TECHNICAL RISK TERMINAL VALUE RISK RISK RELATED TO FUTURE SHARE ISSUES LEGAL AND REGULATORY RISKS PROCESSING OF PERSONAL DATA RISKS RELATING TO AMENDED OR NEW LEGISLATION RISKS RELATING TO THE SHARES DILUTION IN CASE OF A NEW SHARE ISSUE OR SHARE SPLIT RISKS RELATING TO THE COMPANY'S ABILITY TO PAY DIVIDENDS TAX RISK RISK RELATED TO INTEREST RESTRICTION RULES AIFM RISK THE RECENT EQUITY ISSUE THE RECENT EQUITY ISSUE COSTS THE COMPANY AND THE TRANSACTION THE COMPANY

5 6.2 THE SHARES THE SUBSIDIARIES THE TARGETS TRANSACTION AND GROUP STRUCTURE CONTACT INFORMATION THE PROPERTIES GENERAL OVERVIEW PORTFOLIO SUMMARY HALMSTAD VRANGELSRO 5: UMEÅ LOGISTIKEN THE TENANT GROUP STRUCTURE BUSINESS MODEL DISTRIBUTION PLATFORM DELIVERY PROCESS FINANCIALS THE LEASE AGREEMENTS SUMMARY OF THE LEASE AGREEMENTS DETAILS IN THE LEASE AGREEMENTS FINANCIAL INFORMATION TRANSACTION FINANCING KEY FIGURES FINANCIAL CALENDAR OWNERS AND SHARE CAPITAL DESCRIPTION OF DEBT FINANCING ESTIMATED DIVIDENDS ESTIMATED INCOME AND COSTS ESTIMATED TAX RESIDUAL VALUE THE MANAGEMENT OF THE COMPANY BOARD OF DIRECTORS, MANAGEMENT AND OWNERSHIP STRUCTURE THE BUSINESS MANAGEMENT AGREEMENT THE TECHNICAL FOLLOW-UP AGREEMENT OTHER FUTURE FEES TO PARETO POTENTIAL CONFLICT OF INTEREST AUDITOR EMPLOYEES APPENDICES Appendix 1: Articles of association of the Company 5

6 1 LIST OF DEFINITIONS Adjusted EBITDA EBITDA (as defined below) as adjusted for value adjustments, capital gains/losses and transactions costs related to the Transaction Agreed Portfolio Value SEK 1,084,000,000 BidCos Halmslätten Halmstad AB, corporate identification number and Halmslätten Umeå AB, corporate identification number Business Management Agreement Business Manager CAPEX Closing Company The business management agreement between the Business Manager and the Company regarding the management of the Group PBM Capital Expenditure The consummation of the acquisition of the Targets Halmslätten Fastighets AB (publ), corporate identification number Company Description This Company Description, dated 17 January 2019 Company Costs CPI Day 1-profit Debt Facility Deferred Tax Discount Dividend Yield EBITDA Group All costs related to the management of the Group, which are not defined as Property Related Costs, for example the fee to the Business Manager and other necessary administration costs Swedish consumer price index (Sw. Konsumentprisindex), published by Statistics Sweden (Sw. Statistiska Centralbyrån) Profit recognised in the consolidated pro forma balance sheet that represents the difference between the Agreed Portfolio Value, including tax related deductions, and the market value of the Portfolio Debt facility of SEK 650 million, which was used to finance the Transaction, together with the capital raised in the Recent Equity Issue The difference between the Agreed Portfolio Value and the tax residual value of the Properties as of 31 December 2017, multiplied by approximately 5.5% Annualised total cash dividend payments to the holders of the Shares divided by the total amount raised through the Recent Equity Issue Earnings on a consolidated basis before interest, taxes, depreciation and amortisation of eventual goodwill The Company including the Subsidiaries and the Targets (each a "Group Company") 6

7 Halmstad Lease Agreement ICR Lease Agreements LTV The lease agreement between the relevant Target Company and the Tenant regarding premises within the property Halmstad Vrangelsro 5:4 Interest coverage ratio, being Adjusted EBITDA divided with interest expenses of the Group The Tenant leases its premises under two separate lease agreements, jointly defined as the Lease Agreements Loan to value (Debt Facility divided by the Agreed Portfolio Value) Manager or Pareto Pareto Securities AB, corporate identification number Martin & Servera Money Laundering Act MTF Net Portfolio Value Net Real Estate Yield NOI PBM Properties / Portfolio Property Manager Property Related Costs Recent Equity Issue Martin & Servera AB, the parent company of the Martin & Servera group, and its subsidiaries The Swedish Money Laundering and Terrorist Financing (Prevention) Act (Sw. lag (2017:630) om åtgärder mot penningtvätt och finansiering av terrorism) Multilateral trading facility The Agreed Portfolio Value minus the Deferred Tax Discount Annualised, unlevered, NOI, divided by the Agreed Portfolio Value Net operating income, being all amounts payable to the Group arising from or in connection with any lease, less any Property Related Costs Pareto Business Management AB, corporate identification number The registered freehold properties Halmstad Vrangelsro 5:4 and Umeå Logistiken 3 and the buildings located thereon, which were acquired through the acquisition of the Targets PBM All operating costs (excluding Company Costs and CAPEX) connected to the handling of the Properties The issuance of 4,450,000 new Shares in the Company resolved on an extraordinary general meeting on 16 November 2018 Share Purchase Agreement The share purchase agreement entered into on 10 December 2018 by and between the BidCos on behalf of the Company, as purchasers and the Vendor as seller regarding the purchase of all shares in the Targets and indirectly the Portfolio Shares The 4,450,000 shares in the Company Subsidiaries Halmslätten Midco 1 AB (corporate identification number ), Halmslätten Midco 2 AB (corporate identification number ), Halmslätten Halmstad AB (corporate identification number ) and Halmslätten Umeå AB (corporate identification number ), all Swedish limited liability 7

8 companies, registered with the Swedish Companies Registration Office on 31 October 2018 Targets Technical Follow-up Agreement Tenant Transaction Umeå Lease Agreement Vrangelsro 5:4 Fastighets AB, corporate identification number and AxLogistik Nord AB, corporate identification number (individually a "Target Company") The technical follow-up agreement between the Property Manager and the Company regarding the technical follow-up of the Properties Martin & Servera Logistik AB, corporate identification number All transactions, including but not limited to the transfers under the Share Purchase Agreement The lease agreement between the relevant Target Company and the Tenant regarding premises within the property Umeå Logistiken 3 Vendor Axfast AB, corporate identification number WAULT The weighted average unexpired lease term of the Lease Agreements as of 1 October

9 2 RESPONSIBILITY STATEMENT The Board of Directors in the Company is responsible for the information given in this Company Description. The Company confirms that, having taken all reasonable care to ensure that such is the case, the information contained in this Company Description is, to the best of the Company s knowledge, in accordance with the facts and contains no omissions likely to affect its import. Any information in this Company Description and in the documents incorporated by reference which derive from the Vendor and other third parties have, as far as the Company is aware and can be judged on the basis of other information made public by that third party, been correctly represented and no information has been omitted which may serve to render the information misleading or incorrect. The Board of Directors confirms that, having taken all reasonable care to ensure that such is the case, the information in this Company Description is, to the best of the board member s knowledge, in accordance with the facts and contains no omission likely to affect its import. The Board of Directors of Halmslätten Fastighets AB (publ) 9

10 3 INVESTMENT SUMMARY This summary should be read as an introduction to the Company Description, and is entirely subordinated to the more detailed information contained in this Company Description including its appendices. Any decision to invest in the Shares should be based on an assessment of all information in this Company Description and any other relevant information. In particular, potential investors should carefully consider the risk factors mentioned in section 4 (Risk factors). For an explanation of definitions and terms used throughout this Company Description, please refer to section 1 (List of Definitions). 3.1 Summary of the Company, the Tenant and the Portfolio The Company is a Swedish limited liability company which has, through the BidCos, acquired all shares in the Targets, which are the sole owners of the Properties. The Portfolio consists of two logistics properties located in Halmstad and Umeå. Both of the properties are modern and perceived to be energy efficient, and was specifically designed and built for the Tenant in 2009 and 2015, respectively. The Portfolio comprises a total lettable area of approximately 72,985 square metres. Halmstad Vrangelsro 5:4 is the largest property and corresponds to approximately 68% of the total lettable area in the Portfolio and Umeå Logistiken 3 corresponds to approximately 32% of the total lettable area in Portfolio. The Properties are fully let to the Tenant, which is a company within the Martin & Servera group, a wholesaler in the Swedish grocery and restaurant equipment industry, with a remaining lease term of approximately 15.1 years in Halmstad Vrangelsro 5:4 and approximately 12.3 years in Umeå Logistiken 3, as of 1 October Most of the warehouse premises are refrigerated and frozen premises (Sw. Kyl- och fryslager) and split into different temperature zones ranging from degrees celsius. Both Properties are designed for energy efficiency. For example, the Properties are fully self-sufficient in heating through heat recycling from the cooling systems, and Umeå Logistiken 3 is fitted with rooftop solar panels and motion sensor LED light fixtures to optimise energy consumption. Both Properties have environmental certificates according to the Building Research Establishment Environmental Assessment Method ("BREEAM"). The estimated annual rent for the year 2019, including a running supplement in Umeå Logistiken 3 for tenant improvements, is estimated to approximately SEK 58.9 million, corresponding to approximately SEK 807 per square metre. The Lease Agreements are 100% adjusted in accordance with Swedish CPI. The NOI of the Portfolio is estimated to amount to approximately SEK 57.2 million, equivalent to a Net Real Estate Yield of approximately 5.3%. The Properties share of the Portfolio s total rental income Umeå Logistiken 3 Halmstad Vrangelsro 5:4 Rental income, share Rental income, share 35% 65% Source: the Vendor and the Manager 10

11 The Properties location Umeå Halmstad Source: the Vendor and the Manager 3.2 Summary of financial information The purchase price was based on the Agreed Portfolio Value, and was financed with the Recent Equity Issue of SEK 445 million and the Debt Facility of SEK 650 million. Key financial figures include: Net Real Estate Yield of approximately 5.3% Estimated Dividend Yield of approximately 8.0% Initial LTV of approximately 60%, with no amortisation on the Debt Facility 3.3 Summary of the Recent Equity Issue The Company issued a total of 4,450,000 Shares during December 2018, at a price of SEK 100 per Share. The formal resolution to issue a total of maximum 5,000,000 new shares in the Company was taken by the extraordinary general meeting on 16 November 2018, and the resolution of the extraordinary general meeting was, in accordance with the Swedish Companies Act (Sw. Aktiebolagslagen (2005:551)), based upon a proposal by the Board of Directors. In connection with the Recent Equity Issue, the shares that existed in the Company prior to the Recent Equity Issue were redeemed at a redemption price of SEK 500,000 in aggregate, and for this purpose, the share capital was reduced by SEK 500,

12 4 RISK FACTORS Prospective investors should be aware that investments in shares are always associated with risks. The financial performance of the Group and the risks associated with the Group s business are important when making a decision to invest in the Shares. There can be no guarantees or assurances that the Company s objectives are met and that an investment in turn will generate a positive return for the investor. A number of factors influence and could influence the Group s operations and financial performance and ultimately the Company s ability to pay dividends. In this section a number of risk factors are illustrated and discussed, both general risks pertaining to the Company s operations and material risks related to the Shares as financial instruments. The risks described below are not the only ones the Group is exposed to. Only a limited due diligence review was performed on the Properties and the Targets based on the documentation made available to the Manager by the Vendor, with respect to the Properties and the Targets. Additional risks that are not currently known to the Company, or that the Company currently considers to be immaterial, could have a material adverse effect on the Group s business. The order in which the risks are presented is not intended to provide an indication of the likelihood of their occurrence or of their relative significance. This Company Description contains forward-looking statements based on current expectations which involve risks and uncertainties. The actual results could differ materially from the results anticipated in these forward-looking statements as a result of many factors, including, but not limited to, the risk factors set forth in this section and elsewhere in this Company Description. The cautionary statements made in this Company Description should be read as being applicable to all forward-looking statements wherever they appear in this Company Description. There is a risk that the current expectations, and as such the forward-looking statements, are not correct. If so, it could affect the Group s financial conditions and the equity returns negatively. 4.1 Limited or no substantial operating history The Company is in a development stage and has recently been formed for the purpose of carrying out its business plan contained in this Company Description. Although the Business Manager and the Property Manager have many years experience in the business sector, the Company is new and as such has no operating history. The Company is therefore depending on the Business Manager and the Property Manager in order to carry out its business plan and conduct its day-to-day business. If the Business Manager or Property Manager fail to carry out the Company s business plan in a satisfactory manner, as applicable, there is a risk that the Company and the Group would not be able to operate in accordance with its business plan or comply with its obligations or claim benefits under other third-party agreement, which may result in delays in meeting its business plan, increased costs, potential damages or terminated agreements. There is also a risk that the Group would have to procure management services from other providers on terms less favourable, if such services are available at all. If any of the above risks would materialise, it could adversely affect Group's business, financial condition and equity returns. 4.2 Market risk Real estate investment risk is linked to the value of the real estate. This risk can thus be defined as those factors that influence property valuations. The main factors are the supply and demand for commercial properties, as well as the yield that investors are willing to accept when purchasing real estate. The real estate market is influenced by the vacancy rate in the market. The vacancy rate is influenced by several factors on both a micro and macro level. Negative changes in the general economic situation, including business and private spending, may adversely affect the demand for commercial premises. The free capacity is also influenced by construction and refurbishment activity. Further, the real estate market is influenced by the demand for the type of real estate that the Group owns. During certain periods there might be fierce competition for a few real estate objects, and 12

13 it might be difficult to purchase desired objects at the desired price. In other periods, it might be difficult to sell real estate objects at the desired price. A decrease in the value of the Properties would adversely affect the valuation of the Group's property portfolio and hence the Group's business, financial condition and equity returns. 4.3 Transaction risk The Share Purchase Agreement contains limitations as to which claims can be made against the Vendor and at what point in time any such claims can be made by the Group. The Targets may also have hidden liabilities which do not relate to the Properties. Losses incurred due to such liabilities may not be possible to claim from the Vendor and any such liabilities may have a negative effect on the Group's business, financial condition and equity returns. 4.4 Operational risk The financial status and strength of a tenant, and thus its ability to pay the rent etc., will always be a decisive factor when evaluating the risk of property companies. Operational risk also include risk related to restrictions in lease agreements, risk related to legal claims from tenants and/or authorities, including tax authorities and other third parties, risk for increased maintenance costs, risk of decreased technical conditions and risk for hidden defects and emissions. The initial lease term of the Umeå Lease Agreement expires 23 January 2031 and the initial lease term of the Halmstad Lease Agreement expires 31 October Thereafter, each of the Lease Agreements may be subject to termination for vacation (Sw. uppsägning för avflytt). There are certain risks involved with obtaining new tenants, such as a potential higher counterparty risks and increased costs due to renovations or adjustments, which could affect the Group's financial condition negatively. In addition, the Group's successfulness in negotiating new lease agreements on favorable terms and the obtaining of tenants is dependent upon the general condition of the real estate market at such time. Further, if either of the Properties in the future must be renovated and/or adjusted to serve the needs of a new tenant, or serve several tenants instead of a single tenant, such investments could affect the Group s financial condition and equity returns negatively. There could also be a period when any of the Properties have no tenant and consequently no income. The realisation of any of the above could affect the Group s business, financial condition and equity returns negatively. 4.5 Counterparty risk The Group is dependent on two substantial lease agreements with the Tenant, meaning that the financial strength of the Tenant is critical and the Group's exposure of economic risks is increased. In the event the Tenant is not able to pay the rent or otherwise fulfil its economic liabilities under the Lease Agreements, this would affect the Group's business, financial condition and equity returns negatively. Martin & Servera, being the parent company of the Tenant, has guaranteed the Tenant's obligations under the Lease Agreements. However, there is a risk that, upon an enforcement of the parent company guarantee, the parent lacks assets to meet its payment obligations under the guarantee. The lack of assets during an enforcement of such parent guarantee may affect the Group's business, financial conditions and equity returns negatively. 4.6 Risks related to the buildings Property investments and property management always contain a technical risk related to the operations of the buildings within the property, including, but not limited to, construction issues, hidden defects, damage (including through fire or other natural disasters) and pollution. These types of technical problems could result in significant 13

14 unforeseen costs relating to the buildings within the Properties. For example, there are cracks in the concrete floor within the Halmstad Property, according to a report from The cracks in the floor may have an impact on the current or future use of the property and the Company may have to fully bear the costs relating to remedial of the cracks or costs relating to the floors not being possible to use in the intended manner due to the cracks. Furthermore, remarks have been noted in the inspection protocols of, for example, the doors and the fire alarm systems on the Halmstad Property and the Umeå Property. The rectification of such remarks could impose costs on the Targets and may further restrict the use of the Properties while rectification is carried out. If the Company encounters any technical issues relating to the buildings within the Properties in the future, such as construction issues, hidden defects or damage, this could substantially increase the costs relating to the Properties. Furthermore, technical issues, as described above, may give the Tenant the right to claim rent reduction or damages from a Target Company. The realisation of any of the above could affect the Group s business, financial condition and equity returns negatively. 4.7 Risk related to previous construction works The buildings within the Properties were built in 2009 and 2015 in Halmstad and Umeå, respectively, and the Targets entered into construction agreements in relation thereto. There is a risk that there are deficiencies in the constructions or that other costs will arise due to the completed works and that the Targets do not have sufficient protection under the relevant construction contracts. Construction inspections have been carried out in relation to the buildings on the Properties and according to protocols from such inspections, remarks have been made regarding certain aspects of the constructions, for example regarding electricity, ventilation and ground issues. Hence, there is a risk that there are outstanding costs relating to the remedial of such remarks and that the Company will incur future unforeseen costs. Furthermore, relevant documentation forming a part of the construction contracts, such as tender documents (Sw. Andbudshandlingar), certain general regulations (Sw. allmänna föreskrifter) and certain additional agreements, are missing regarding the previously executed contract works. Consequently, it is not possible for the Company to assess which level of protection the Targets have under the construction contracts. There is a risk that the Targets do not have sufficient protection under the relevant construction contracts, such as customary construction warranties and guarantees from the contractors. If the Targets do not have sufficient protection under the construction contracts, the Company may have to fully bear the costs relating to remedial of deficiencies in the construction works or costs relating to the buildings not being possible to use in the intended manner due to such deficiencies. Furthermore, there is a risk that it will be difficult to determine which contractor is responsible for a particular risk/issue, since the works on the Properties have been carried out under construction contracts with several different contractors. The Targets have entered into construction contracts with several contractors for different parts of the construction works, which means there is no main responsible contractor. There is also a risk that the smaller contractors enters into bankruptcy or liquidation, resulting in the Company not being able to claim any damages or reimbursement for costs relating to the contract works. The realisation of any of the above could affect the Group s business, financial condition and equity returns negatively. 4.8 Risks related to rental income There is a risk that the Targets, in their capacity as landlords, may not be able to fully recover its costs for maintenance, media costs or other costs relating to the Properties, through rental supplements. For example, the Tenant is obliged to have its own subscriptions for all media, including water and sewage, according to the Umeå Lease Agreement. However, the Tenant has been charged costs for water and sewage by the Targets. Furthermore, the Tenant shall pay a preliminary rental supplement for water and sewage as well as mandatory inspections, according to the Halmstad Lease Agreement. However, there is no provision in the Halmstad Lease Agreement regarding adjustment, based on actual costs, of such preliminary rental supplements. 14

15 If the Targets, in their capacity as landlords, are not able to fully recover the costs for maintenance, media costs or other costs relating to the Properties from the Tenant, there is a risk that the Group will incur unforeseen costs. The fact that the handling of the costs for water and sewage under the Umeå Lease Agreement is not in accordance with what has been agreed in the Umeå Lease Agreement, as well as the lack of regulation regarding adjustment of the preliminary rental supplements under the Halmstad Lease Agreement, are examples of such risk. Furthermore, such discrepancies may create uncertainties with respect to applicable terms and conditions regarding the rental supplements and increases the risk exposure for future disputes. The realisation of any of the above could affect the Group s business, financial condition and equity returns negatively. Furthermore, if any of the Properties is damaged to such extent it can no longer be used for the intended purpose, or if the authorities due to the Properties condition issue a prohibition to use the premises for the intended purpose, or if other obstacles occur which affect the Tenant s right to use the premises, there is a risk that the Lease Agreements may expire in advance. If any of the Properties is damaged or the use of any of the Properties are limited due to a decision by the authorities, there is also a risk that the Tenant, under certain circumstances, may be entitled to pay a lower rent than agreed in the Lease Agreements. If some or all lease agreements would expire in advance, or if the rents would be subject to a material reduction, this could have an adverse effect on the Group s business, financial condition and equity returns. 4.9 Risk relating to unforeseen costs regarding the Properties There is a risk that the Company, in its capacity as property owner, will be liable for future costs regarding the Properties. The responsibility for costs relating to maintenance as well as investments and repairs at the Properties are not fully regulated in the Lease Agreements. For example, the Company may have to bear significant costs for snow clearance of the roof. The responsibility for snow clearance of the roof is not clearly allocated in the Umeå Lease Agreement, and will thus likely be the responsibility of the Target Company, and is the responsibility of the Target Company under the Halmstad Lease Agreement. The responsibility for snow clearance of the roof, as well as the responsibility to bear other costs relating to the maintenance as well as investments and repairs at the Properties may entail significant costs, which could affect the Group s financial conditions and the equity returns negatively. Further, the estimated maintenance and capital expenses on which the forward-looking statements have been calculated are based upon information from the Vendor and historic maintenance costs for the Properties. There is a risk that the maintenance costs and capital expenses for various reasons may exceed the estimated maintenance costs and capital expenses presented herein, and could therefore adversely affect the Group s business, financial condition and equity returns. In regards of unforeseen costs, property investments and property management always contain a technical risk related to the operations of the property, including, but not limited to, construction issues, hidden defects and damage (including through fire or other natural disasters). These types of technical problems could result in significant unforeseen costs relating to the property. If the Properties encounter any such unforeseen costs in the future, this could substantially increase the costs relating to such properties, which could affect the Group s business, financial condition and equity returns negatively Increased maintenance costs The estimated maintenance and capital expenses on which the forward-looking statements in this Company Description have been calculated are based upon information from the Vendor and historic maintenance costs for the Properties. There is a risk that the maintenance costs and capital expenses for various reasons may exceed the estimated maintenance costs and capital expenses presented herein, and could therefor adversely affect the Group s financial condition, business and equity returns. 15

16 4.11 Risk relating to encumbrances on the Properties According to the excerpt from the Swedish land register (Sw. Fastighetsregistret), there is an ancient remain (Sw. fornlämning) and an easement concerning power line (Sw. kraftledning) within the property Halmstad Vrangelsero 5:4 and a utility easement (Sw. ledningsrätt) encumbering the property Umeå Logistiken 3. The encumbrances on the Properties may restrict the possibility to develop and exploit the Properties going forward and can thereby affect the valuation of the Properties, which could affect the Group s business, financial condition and equity returns negatively. However, no risks related to the current use of the properties have been identified Risk relating to tax on advertising The Halmstad Lease Agreement does not contain any provision allocating the responsibility for paying a potential tax on advertising. Without any provision in the Lease Agreements clarifying who carries the responsibility of paying a potential tax on advertising, it cannot be excluded that the Company, in its capacity as property owner, will be liable to pay such tax. The imposing of a tax on advertising could have an adverse effect on the Group s business, financial condition, and equity returns Financing risk Financial risk includes, but is not limited to, the risk of not achieving the desired leverage ratio, not fulfilling loan or bond obligations, interest rate fluctuations, risk related to effects of fair value adjustments and changes in laws and rules regarding tax and duties. The Group is deemed to be sufficiently funded following the Recent Equity Issue and the entering into of the Debt Facility. However, additional capital needs, due to for example unforeseen costs and/or larger capital expenditures than expected, cannot be ruled out. There is a risk that the Group cannot satisfy such additional capital need on favourable terms, or at all, which could have an adverse effect on the Group s business, financial condition and equity returns Refinancing risk At maturity of the Group s debts, the Group will be required to refinance such debt. The Group s ability to successfully refinance such debt is dependent on the conditions of the financial markets in general at such time. As a result, there is a risk that the Group s access to financing sources at a particular time may not be available on favourable terms, or available at all. The Group will also, in connection with a refinancing of its debts, be exposed to interest risks on interest bearing current and non-current liabilities. Changes in interest rates on the Group s liabilities will affect the Group s cash flow and liquidity, hence may adversely affect the Group's financial conditions and the equity returns. The Group s inability to refinance its debt obligations on favourable terms, or at all, could have a material adverse effect on the Group s business, financial condition and results of operations. According to the indicated terms of the loan agreement, the loan under the Debt Facility assumes a maturity of 5 years Compliance with financing agreements The loan agreement the Group has entered into makes the Group subject to a number of covenants dictating what actions the Group may and may not take. Should the Group breach these covenants, it may trigger increased amortisation and an up-streaming restriction. Further, additional financing costs may incur and the loans may be accelerated, which could result in bankruptcy and liquidation of the Group s assets. Such events would negatively affect the Group s financial condition and equity returns. 16

17 The loan agreement further contain an ownership clause (i.e. a change of control clause) which is triggered should the Company cease to own or control 100%. of the Shares in the Parent MidCo, should the Company cease to be listed on Spotlight or if any person becoming obliged under the listing agreement with Spotlight to make a public offer for all the shares in the Company and such offer has been accepted by 50%. or more of the shareholders in the Company. Should the change of control be triggered, the full amount outstanding under the loan agreement may be declared due and payable at short notice and/or all commitments of the lender under the loan agreement may be cancelled. There is a risk that a refinancing in connection with such an event would lead to increased costs and therefore affect the Group s financial conditions and the equity returns negatively Geographic risk This Company Description contains certain market information relating to the property market in general and particularly in Sweden. Market values of properties in general and in Sweden may decline in the future and negatively impact the business, financial condition and equity returns of the Group Management risk The Group is initially dependent upon the Business Manager and the Property Manager for the implementation of their strategy and the operation of their activities. Although the Business Management Agreement is nonterminable during the first 5 years from signing (with certain exceptions) and thereafter prolonged until terminated with a notice period of 12 months, there is an uncertainty with regard to the management of the Group in the event of a termination of the Business Management Agreement, which would also result in a termination of the Technical Follow-up Agreement. In addition, the Group will be dependent upon the services and products of certain other consultants, contractors and other service providers in order to successfully pursue with the Group s business plan. There is a risk that the Group cannot purchase new management services or other necessary services or products on favourable terms, or at all, which could have an adverse effect on the Group s business, financial condition and equity returns Property risk Returns from the Portfolio will depend largely upon the amount of rental income generated from the Properties, the costs and expenses incurred in the maintenance and management of the Portfolio, necessary investments in the Properties and upon changes in its market value. Rental income and the market value for properties are generally affected by overall conditions in the economy, such as growth in gross domestic products, employment trends, inflation and changes of interest rates. Both property values and rental income may also be affected by competition from other property owners, the perceptions of prospective buyers and/or the attractiveness from tenants, convenience and safety of the Properties. In the event any such risks are materialised it could negatively impact the business, financial condition and equity returns of the Group Environmental and technical risk According to the polluter pays-principle established under Swedish environmental law, the operator who has contributed to pollution will be responsible for remediation. However, should it not be possible to locate the polluter, the property owner is subsidiary responsible for remediation and associated costs. Accordingly, there is a risk that the Company in its capacity as property owner may be held responsible for costly remediation works Terminal value risk Property and property related assets are inherently difficult to appraise due to the individual nature of each property and due to the fact that there is not necessarily a liquid market or clear price mechanism. As a result, 17

18 valuations may be subject to substantial uncertainties. There is a risk that the estimates from a valuation process are not reflecting the actual sales price. Any future property market recession could materially adversely affect the value of the Properties and subsequently the Shares in the Company Risk related to future share issues If the Company would need additional capital in the future, the lack of participation from investors could pose a risk to the Company s financial position (until such further issue is completed). In addition, should the Company in the future choose to increase its share capital by way of a share issue, existing shareholders would under most circumstances have a preferential right to subscribe for Shares unless the shareholders of the Company resolves to approve a deviation from such rights at a general meeting. Existing shareholders in jurisdictions where participation in such share issue would require additional prospectuses, registration and/or other measures than those required under Swedish law could be excluded from their right to subscribe for new shares if such shares or shareholder rights are not registered under i.e. the U.S. Securities Act or equivalent regulations in other concerned jurisdictions and if no exemptions from the registration requirements are applicable. As of the day of this Company Description, it is unlikely that the Company will apply for such registration and it cannot be guaranteed that any exemption from registration requirements will be applicable which could have the effect that the ownership of shareholders being based abroad is diluted. Furthermore, investors who are not participating, or who are not given the possibility to participate, in future issues will risk having their ownership diluted Legal and regulatory risks Investments in the Shares involve certain risks, including the risk that a party may successfully litigate against the Group, which may result in a reduction in the assets of the Group. Changes in laws relating to ownership of land could have an adverse effect on the value of Shares. New laws may be introduced which may be retrospective and affect environmental planning, land use and/or development regulations. Public authorities at all levels are actively involved in the promulgation and enforcement of regulations relating to taxation, land use and zoning and planning restrictions, environmental protection and safety and other matters. The institution and enforcement of such regulations could have the effect of increasing the expenses and lowering the income or rate of return of the Company, as well as adversely affecting the value of the Portfolio. Public authorities could use the right of expropriation of the Properties if the requirements for expropriations are satisfied. Any expropriation will entitle the Group to compensation but the Group s financial condition may, irrespective of such compensation, be negatively affected Processing of personal data In May 2018, the General Data Protection Regulation ("GDPR"), issued by the European Union ("EU"), entered into force. The implementation of a new system for personal data processing and actions needed to ensure compliance with the GDPR may involve certain costs for the Group. The implementation of a new system for personal data processing is important as data processing in breach of the GDPR could result in fines amounting to a maximum of SEK 20,000,000 or 4% of the Group's global turnover. If the Group fails to comply with the GDPR, this may have a negative impact on the Group's business, financial position and equity returns. 18

19 4.24 Risks relating to amended or new legislation This document is based on Swedish law in force at the date of this Company Description. No assurance can be given on the impact of any possible future legislative measures, regulations, changes or modifications to administrative practices or case law 4.25 Risks relating to the Shares The intention is that the Company will apply for listing of the Shares on Spotlight following completion of the Transaction. However, there is a risk that the Shares will not be admitted to trading within the expected time or at all. Further, even if the Shares are admitted to trading on Spotlight, there is a risk that active trading in the Shares will not occur and hence there is a risk that a liquid market for trading in the Shares will not occur or be maintained. Furthermore, the subscription price of the Shares in the Recent Equity Issue may not be indicative compared to the market price of the Shares if they are admitted for trading on Spotlight. Real estate is considered an illiquid asset, and normally it takes months to invest in and realise direct investments in property. The Shares liquidity are uncertain, and it can be difficult to sell the Shares in the secondary market. An investor can only exit the investment through a sale of the Shares in the secondary market or if the Company sells any of the Properties. Investments in the Shares are only suitable for investors who can bear the risks associated with a lack of liquidity in the Shares Dilution in case of a new share issue or share split In connection with the listing of the Shares with on Spotlight, the Shares will have to be distributed to the public in order to meet the listing requirements of Spotlight. Such distribution may take place by way of a secondary sale of the Shares in the Company to a larger number of shareholders. However, if such secondary sale proves insufficient to meet the requirements of Spotlight, a new share issue or a share split may need to be carried out resulting in a dilution (in respect of number of shares) of the existing (at the time of the issue) shareholders holding in the Company. As such new share issue or split would be made on market conditions, there would however be no financial dilution of the Shares. Further, f the Company needs further equity in the future, inadequate participation in any future share issue on the part of investors may pose a risk to the solvency of the Company until such share issue has been completed. Investors that do not participate in future share issues will risk dilution of their ownership interests. A capital need may for example arise upon a future refurbishment of the Properties, or other necessary investments pertaining to the Properties, if the costs are not funded by a bank or another debt provider Risks relating to the Company's ability to pay dividends The Company's ability to pay dividends is dependent on several factors, such as the Group's distributable reserves and liquidity situation, as well as any limitation imposed by applicable law and regulations. The initial tax due diligence indicates that AxLogistik Nord AB have had large depreciations (due to a high level classification of building inventories) which will have an effect on the equity in the entity. This could impact the Group s ability to pay dividends going forward, until the inventories are written off. Furthermore, any payment of dividend may be subject to lenders approval and certain covenants in the financing documentation. Any payment of dividend from the Group is dependent on a proposal from the Board of Directors of the Company and ultimately the decision by a general meeting. There is a risk that the Company will not be able to pay dividends as projected in this Company Description. 19

20 4.28 Tax risk The Group's main tax risks are related to changes to or possible erroneous interpretations of tax legislation. Such changes or erroneous interpretations could lead to tax increases or other financial losses. Realisation of such risks might have a material adverse effect on the Group's business, financial condition, and equity returns. It is possible that the Group has made or will make interpretations on the tax provisions that differ from those of the Swedish Tax Agency (Sw. Skatteverket), and that as a result, the Swedish Tax Agency will impose taxes, tax rate increases, administrative penalties, or other consequences on any of the Group Companies. This could have a material adverse effect on the Group's business, financial condition, or results of operations, and affect the Group s business, financial condition, and equity returns negatively Risk related to interest restriction rules Due to the implementation of EU Anti-tax Avoidance Directive, the Swedish Government have proposed to revise the domestic rules governing the tax deductibility of interest expenses. The new rules, which could still be subject to changes during the legislative process, will be applicable for financial years ending on or after 1 January The Company has projected for the new rules as presented below, but any further changes of such rules could have a negative impact on the Company s financial condition and consequently its dividend capacity. Under the current tax rules in Sweden, interest expenses are as a main rule fully deductible for tax purposes. However, there are restrictions regarding the deductibility of interest expenses on intra group debt. On 14 June 2018, the Swedish Parliament enacted a proposal on new tax rules for the corporate sector, including the real estate sector (revised from previously presented proposal). The proposal is extensive and a very short summary is presented below. According to the new rules, the current targeted interest deduction rule applicable with respect to intra group debt will be modified (somewhat narrowed in scope) and a general interest deduction limitation rule is introduced which also encompasses external debt such as bank debt. The general rule limits a company s deduction for net interest expense to 30% of tax adjusted EBITDA. A simplification rule will also be implemented, under which negative net interest below SEK 5 million will be deductible without having to satisfy the general interest deduction limitation rule. If the company is part of a group, the total deducted negative net interest of the group may not exceed SEK 5 million under the simplification rule. It will be possible to carry forward interest expense that cannot be deducted for up to six years. In addition to the interest deductibility restrictions a reduction of the CIT rate will be introduced in two steps. As of 2019 the CIT rate will be reduced to 21.4% and from 2021 an additional reduction to 20.6% is made AIFM risk The Alternative Investment Fund Managers Directive 2011/61/EU has been implemented in Sweden. Various unresolved/unclear issues regarding how to interpret the directive remain. The Company has deemed itself to fall outside of the scope of the AIFM Directive due to its industrial purpose, i.e. because the Company shall indirectly generate returns through the Properties operations in the market and not necessarily by divesting the Properties. However, there is a risk that the Company may be considered an AIFM, which would among other result in additional costs to a depositary and a manager. The risk factors mentioned above are not comprehensive and there may be other risks that relate to or may be associated with an investment in the Company. 20

21 5 THE RECENT EQUITY ISSUE 5.1 The Recent Equity Issue The Company has, through the Bidcos, acquired 100% of the shares in the Targets from the Vendor. The Portfolio includes the registered properties Halmstad Vrangelsro 5:4 and Umeå Logistiken 3. The purchase price for the Targets is based on the Agreed Portfolio Value of SEK 1,084 million, subject to customary purchase price adjustments. The Company has raised equity in the amount of SEK 445,000,000 by an equity issue in which the Company issued 4,450,000 new shares, to partially finance the acquisition. The proceeds of SEK 445 million from the Recent Equity Issue have, together with the SEK 650 million from the Debt Facility, exclusively been applied towards fully funding the acquisition of the Targets, including transaction costs and working capital requirements. The Recent Equity Issue was based on a formal resolution to issue up to 5,000,000 new Shares in the Company, taken by the extraordinary general meeting on 16 November The resolution of the extraordinary general meeting was, in accordance with the Swedish Companies Act (Sw. Aktiebolagslagen (2005:551)), based upon a proposal by the Board of Directors. In connection with the Recent Equity Issue, the 500,000 shares that existed prior to the Recent Equity Issue was redeemed at a redemption price of SEK 1 per share, and for this purpose, the share capital was reduced by SEK 500,000. Following the Recent Equity Issue, the Shares comprise all shares in the Company and the registered share capital of the Company amounts to SEK 4,450,000. Pareto was the sole manager of the Recent Equity Issue. 5.2 Costs The overall costs of the Company in relation to the Recent Equity Issue are expected to amount to approximately SEK 40.4 million. The aggregate net proceeds of the Company will be approximately SEK million after startup costs in relation to the Recent Equity Issue. Please find provisions on future fees to the Manager and the Business Manager in sections 11.2 (The Business Management Agreement), 11.3 (The Technical Follow-up Agreement) and 11.4 (Other future fees to Pareto). 21

22 6 THE COMPANY AND THE TRANSACTION 6.1 The Company The Company is a Swedish public limited liability company with corporate identification number , registered with the Swedish Companies Registration Office since 12 October The current registered address of the Company is P.O. Box 7415, SE Stockholm. The Company and the operations of the Company will be governed by Swedish law. The Company was established by PBM and has no previous business history. The Company owns and manages the ownership of all of the shares in the Targets, through the Subsidiaries. The Company is the ultimate parent company of the Group and the counterparty to the Business Manager and the Property Manager under the Business Management Agreement and the Technical Follow-up Agreement, respectively. The object of the Company is to manage fixed and movable property or manage companies that directly or indirectly own fixed and movable property and collect funding for its business and conduct business related thereto. The articles of association of the Company are included as Appendix 1 to this Company Description. Board of Directors and the management of the Company The duties and responsibilities of the Board of Directors follow from Swedish law and include the overall management and control of the Company. The Board of Directors is elected by the extraordinary general meeting of the Company. The Board of Directors currently consists of three members. Interim Board of Directors Name Position Joined Number of Shares in the Company Robin Englén Chairman of the Board 20/11/ Johan Åskogh Board Member (CEO) 20/11/ Sara Williamson Board Member 20/11/ Source: the Company All board members are employed by the Business Manager. The new Board of Directors, which will include representatives of the investors in the Company, will be appointed at an extraordinary general meeting which will be held on 4 February The interim Board of Directors will therefore be replaced following the extraordinary general meeting. The Company has not entered into any agreements with any member of the Board of Directors concerning benefits after the resignation of the assignment. The proposed board members are Stefan De Geer, Tore Robertsson, Hans Johnsen and Ian Kuylenstierna, please refer to section for further information. The remuneration to the proposed members of the new Board of Directors will be SEK 60,000 to the Chairman of the Board and SEK 40,000 to the Directors. The members of the interim Board of Directors have been part of the Board of Directors in the following other Companies, outside the Group, during the past five years: 22

23 Board of Director assignments for the interim Board of Directors Robin Englén Sara Williamson Johan Åskogh Ongoing board assignments: Ongoing board assignments: Ongoing board assignments: AxLogistik Nord AB AxLogistik Nord AB AxLogistik Nord AB Biz Apartment AB Halmslätten Fastighets AB Bråviken Flahult PropCo AB Biz Apartment Bromma AB Halmslätten Halmstad AB Bråviken Logistik AB (publ) Biz Apartment Gärdet AB Halmslätten Midco 1 AB Bråviken Logistik Fastigheter AB Biz Apartment HS AB Halmslätten Midco 2 AB Bråviken Norrköping PropCo AB Biz Apartment Solna AB Halmslätten Umeå AB Bråviken Nyköping PropCo AB Djurgårdsstadens Fastigheter AB Origa Care AB (publ) Fastighets AB Ridskolan Djurgårdsstadens Fastigheter Holding AB Origa Care Holding AB Halmslätten Fastighets AB Guldslingan Holding AB Origa Care Property Oy Halmslätten Halmstad AB Halmslätten Fastighets AB Origa Property Joutsan Yhdystie Oy Halmslätten Midco 1 AB Halmslätten Halmstad AB Origa Property Järvenpään Purjopolku Oy Halmslätten Midco 2 AB Halmslätten Midco 1 AB Origa Property Kouvolan Ojaäyrääntie Oy Halmslätten Umeå AB Halmslätten Midco 2 AB Origa Property Lahden Eteläinen Rengastie Oy Kävlinge Fastighets AB Halmslätten Umeå AB Origa Property Laukaan Näätämäentie Oy LP1 Götene Skräddaren 1 AB Mälaråsen AB (publ) Origa Property Lohjan Helsingiuksentie Oy LP1 Jönköping Älgskytten 13 AB Origa Care AB (publ) Origa Property Oulaisten Ravikatu Oy LP1 Lidköping Sävare 19:12 AB Origa Care Holding AB Origa Property Raahen Pajuniityntie Oy LP1 Nybro Tallen 58 AB Origa Care Property Oy Origa Property Raision Kellarimäenkatu Oy LP1 Olofström Holje 103:9 AB Origa Property Joutsan Yhdystie Oy Origa Property Riihimäen Paimentytönpolku Oy LP1 Olofström Holje 103:9 KDÄ AB Origa Property Järvenpään Purjopolku Oy Origa Property Rovaniemen Sarkatie Oy LP1 Tingsryd Tingsryd 3:14 AB Origa Property Kouvolan Ojaäyrääntie Oy Origa Property Turun Isohaarlantie Oy LP1 Tingsryd Tingsryd 3:14 KDÄ AB Origa Property Lahden Eteläinen Rengastie Oy Origa Property Ylivieskan Mikontie Oy LP1 Örebro Tackjärnet 3 AB Origa Property Laukaan Näätämäentie Oy Vrangelsro 5:4 Fastighets AB Nya Centrumfastigheter i Lomma AB Origa Property Lohjan Helsingiuksentie Oy One Publicus Fastighets AB Origa Property Oulaisten Ravikatu Oy Previous board assignments: One Publicus Lagern 4 AB Origa Property Raahen Pajuniityntie Oy Pilängen Logistik I AB Origa Care AB (publ) Origa Property Raision Kellarimäenkatu Oy Pilängen Logistik AB Origa Care Holding AB Origa Property Riihimäen Paimentytönpolku Oy Mitt Vard Bolag AB Pareto GIMLE AB (publ) Origa Property Rovaniemen Sarkatie Oy Vårdfastigheter i Sverige I AB (publ) Pareto GIMLE Holding 1 AB Origa Property Turun Isohaarlantie Oy Bostadsrättsföreningen Rådjuret 4 Pareto GIMLE Holding 2 AB Origa Property Ylivieskan Mikontie Oy Pareto GIMLE Holding 3 AB Vrangelsro 5:4 Fastighets AB Pareto GIMLE Holding 4 AB Projektbolag Del Y AB Previous board assignments: Stadsnätsbolaget Mälardalen AB Biz Apt III AB Sydsvenska Hem AB (publ) Bostadsrättsföreningen Odin 12 Sydsvenska Hem förvärvsbolag 6 AB Bostadsrättsföreningen Biz Apartment Gärdet Vrangelsro 5:4 Fastighets AB Vårdboende i Västerparken AB Origa Care Property Oy Origa Property Joutsan Yhdystie Oy Origa Property Järvenpään Purjopolku Oy Origa Property Kouvolan Ojaäyrääntie Oy Origa Property Lahden Eteläinen Rengastie Oy Origa Property Laukaan Näätämäentie Oy Origa Property Lohjan Helsingiuksentie Oy Origa Property Oulaisten Ravikatu Oy Origa Property Raahen Pajuniityntie Oy Origa Property Raision Kellarimäenkatu Oy Origa Property Riihimäen Paimentytönpolku Oy Origa Property Rovaniemen Sarkatie Oy Origa Property Turun Isohaarlantie Oy Origa Property Ylivieskan Mikontie Oy Previous board assignments: JMP Ekonomi och Finans HB Åskogh Konsult AB MJ Etablering IV AB MJ Etablering VII AB MS Etablering IV AB (publ) MS Etablering II AB Stensö Holding AB Hemsö Vaktmästaren Hoilding AB Serneke Projektfastigheter Eskilstuna AB Fibernät i Mellansverige AB Wenas Ottersland AB Bråviken Logistik Jönköping AB Bråviken Logistik Nyköping AB Bråviken Logistik Norrköping AB PBM Etablering 1 AB (publ) Source: the interim Board of Directors 23

24 None of the members of the proposed Board of Directors of the Company has been convicted in fraud-related crimes, has been prohibited from carrying on business, or been engaged as a board member or as a holder of a managerial position in a company going bankrupt or being liquidated during the past five years. The members of the proposed Board of Directors have been part of the Board of Directors in the following other Companies, outside the Group, during the past five years: Other Board of Director assignments for the proposed Board of Directors Stefan De Geer Tore Robertsson Ongoing board assignments: Ongoing board assignments: Nilar International AB ( ) MKB Fastighets AB ( ) De Geer & Co AB ( ) MKB Net AB ( ) Wolseley Nordic Holding AB ( ) Skyddsprodukter i Sverige AB ( ) PCTC Invest AB ( ) Tigerhus 1 AB ( ) Origa Care AB ( ) Städfaktor AB ( ) Skyddsprodukter i Sverige Finans AB ( ) Poolarna Clean AB ( ) A&CO Perfekt Städ AB ( ) Bostadsrättsföreningen Vår Nya Tiger ( ) Previous board assignments: Previous board assignments: Pareto Securities AB ( ) AB Peter Landgren & Co ( ) United Spaces Network Offices AB ( ) HYR-IN i Ängelholm ( ) Kallebäck Property Invest AB ( ) Landgren of Sweden AB ( ) Saltängen Property Invest AB ( ) Fondamentor & Roosgruppen 6 Umeå AB ( ) Fondamentor Umeå Batteriet AB ( ) Fondamentor Umeå Fastigheter AB ( ) Fondamentor & Roosgruppen 5 Umeå AB ( ) Fondamentor & Roosgruppen 7 Umeå AB ( ) Hans Johnsen Ian Kuylenstierna Ongoing board assignments: Ongoing board assignments: Segmons Gård Drift AB ( ) Sperlingsholms Holding AB ( ) Karlsdal Förvaltning AB ( ) Investmentaktiebolaget Fingal ( ) Segervik Sverige AB ( ) Wilfred Holding AB ( ) Farsviken AB ( ) Iona Holding AB ( ) Ruderud Holding AB ( ) BoViva Jorden AB ( ) Konjur AB ( ) Bostadsrättsföreningen Havsfrun 24 ( ) Previous board assignments: Previous board assignments: Skar Förvaltning AB ( ) --- Kihlen Förvaltning AB ( ) Segermo Väst AB ( ) Segermo Entreprenad AB ( ) Segermo Holding AB ( ) Source: the proposed Board of Directors Companies of which the members of the interim Board of Directors and the proposed members of the new Board of Directors have held at least 10% of the capital or voting rights during the past five years are presented in the following table. Any companies of which the members currently hold at least 10% of the capital or the voting rights are also presented in the following table. 24

25 Companies of which the interim Board of Directors holds, or previously held, more than 10% of the shares Robin Englén Johan Åskogh Current holdings: Current holdings: Former holdings: Former holdings: --- Åskogh Konsult AB Sara Williamson Current holdings: --- Former holdings: --- Source: the interim Board of Directors Companies of which the proposed Board of Directors holds, or previously held, more than 10% of the shares Stefan De Geer Tore Robertsson Current holdings: Current holdings: De Geer & Co AB ( ) Skyddsprodukter i Sverige AB ( ) DE GEER, STEFAN ( XXXX) Skyddsprodukter i Sverige Finans AB ( ) Poolarna Clean AB ( ) A&CO Perfekt Städ AB ( ) Städfaktor AB ( ) Tigerhus 1 AB ( ) Bostadsrättsföreningen Vår Nya Tiger ( ) Former holdings: Former holdings: -- HYR-IN i Ängelholm AB ( ) Hans Johnsen Ian Kuylenstierna Current holdings: Current holdings: Ruderud Holding AB ( ) Sperlingsholms Holding AB ( ) Segmons Gård Drift AB ( ) Investmentaktiebolaget Fingal ( ) Karlsdal Förvaltning AB ( ) Iona Holding AB ( ) Farsviken AB ( ) BoViva Jorden AB ( ) Segervik Sverige AB ( ) JOHANSEN, HANS OLA ( XXXX) Former holdings: Former holdings: Segermo Entreprenad AB ( ) -- Segermo Väst AB ( ) Segermo Holding AB ( ) Source: the proposed Board of Directors Please refer to section 11 (The management of the Company) for additional information regarding the management of the Company. 25

26 The CEO of Halmslätten Fastighets AB (publ) The CEO of Halmslätten Fastighets AB (publ) is Johan Åskogh. Mr Åskogh is employed by the Business Manager and will not receive any salary from the Company in the regard of his role as CEO. Although Mr. Åskogh is intended to be replaced as a member of the Board of Directors at the upcoming extraordinary general meeting of the Company, there are no intentions to replace Mr. Åskogh as the CEO of the Company. Mr. Åskogh s tasks correspond to the tasks of the Business Manager, which are presented in section Please see Mr. Åskogh s CV below. Johan Åskogh, CEO: Employed as Business Manager at Pareto Business Management AB CEO of Sydsvenska Hem AB (publ) and Bråviken Logistik AB (publ) 7 years experience from the real estate sector and former CFO of Mengus Holds a degree in Economics from the Stockholm International School of Commerce Proposed Board of Directors of Halmslätten Fastighets AB (publ) An extraordinary general meeting will be held on 4 February At this extraordinary general meeting, a new Board of Directors will be elected. The proposed Board of Directors of the Company is presented below. Please note that each proposed board member s ownership in the Company is as of the date of this Company Description. Companies of which the proposed members of the Board of Directors have held at least 10% of the capital or voting rights during the past five years are presented above in section Any companies of which the proposed members currently hold at least 10% of the capital or the voting rights are also presented in section Stefan De Geer proposed chairman of the board Education: Master s Degree in Law from Uppsala University and a M.C.J. in Law from School of Law at New York University Previous experience as Head of Corporate Finance at Pareto Securities, General Counsel at E. Öhman J:or AB, Partner at Gernandt & Danielsson and Associate at Lagerlöf & Leman Current board assignments: Nilar International AB ( ), De Geer & Co AB ( ), Wolseley Nordic Holding AB ( ), PCTC Invest AB ( ) and Origa Care AB ( ) Former board assignments: Pareto Securities AB ( ), United Spaces Network Offices AB ( ), Kallebäck Property Invest AB ( ) and Saltängen Property Invest AB ( ), Fondamentor & Roosgruppen 6 Umeå AB ( ), Fondamentor Umeå Batteriet AB ( ), Fondamentor Umeå Fastigheter AB ( ), Fondamentor & Roosgruppen 5 Umeå AB ( ) and Fondamentor & Roosgruppen 7 Umeå AB ( ) Independent in relation to the Company and larger shareholders Tore Robertsson proposed board member Education: Middle School Teacher, Jönköping University and Economics, Sociology and Economic History, Lund University CEO of Skyddsprodukter i Sverige AB Previous experience as Regional Manager at Reso and Real Estate Agent 26

27 Current board assignments: MKB Fastighets AB ( ), MKB Net AB ( ), Skyddsprodukter i Sverige AB ( ), Tigerhus 1 AB ( ), Städfaktor AB ( ), Skyddsprodukter i Sverige Finans AB ( ), Poolarna Clean AB ( ), A&CO Perfekt Städ AB ( ) and Bostadsrättsföreningen Vår Nya Tiger ( ) Former board assignments: AB Peter Landgren & Co ( ), HYR-IN i Ängelholm ( ) and Landgren of Sweden AB ( ) Ownership in the Company: 100,000 shares through Skyddsprodukter i Sverige Finans AB Independent in relation to the Company and larger shareholders Hans Johnsen proposed board member Executive Construction Manager (Sw: Arbetschef) and authorised signatory at Nordic Railway Construction Sverige AB Previous experience as Executive Construction Manager at Segermo Entreprenad, CEO at Markarbeten i Värmland Current board assignments: Segmons Gård Drift AB ( ), Karlsdal Förvaltning AB ( ), Segervik Sverige AB ( ), JOHANSEN, HANS OLA ( XXXX), Farsviken AB ( ) and Ruderud Holding AB ( ) Former board assignments: Skar Förvaltning AB ( ), Kihlen Förvaltning AB ( ), Segermo Väst AB ( ), Segermo Entreprenad AB ( ) and Segermo Holding AB ( ) Ownership in the Company: 100,000 shares through Farsviken AB Independent in relation to the Company and larger shareholders Ian Kuylenstierna proposed board member Education: Bachelor of Science in Business Administration from Lund University Real estate and infrastructure investments at Investmentaktiebolaget Fingal Previous experience as Key Client Services Employee at Nordnet and Recruitment at Academic Search Current board assignments: Sperlingsholms Holding AB ( ), Investmentaktiebolaget Fingal ( ), Wilfred Holding AB ( ), Iona Holding AB ( ), BoViva Jorden AB ( ), Konjur AB ( ) and Bostadsrättsföreningen Havsfrun 24 ( ) Ownership in the Company: Represents the Kuylenstierna family through different holdings, who owns 56,000 shares Independent in relation to the Company and larger shareholders 6.2 The Shares All shares in the Company have equal voting rights (1 vote per share) and equal rights to dividends. The Share s ISIN code is SE , CFI code is ESVUFR, FISN code is HALMSLATTE/SH and the ticker at Spotlight will be HALMEN. The Shares are registered by Euroclear Sweden AB that also handles the Company s share register. Shareholders may not receive physical share certificates and all trades with the Shares are handled electronically through banks or other financial institutions. The Shares of the Company are freely transferrable, subject to formal legal requirements and restrictions. Expected first day of trading on Spotlight is on or about 17 January The Company has engaged Pareto as liquidity provider for the Company. 27

28 6.3 The Subsidiaries The Company has one fully owned, immediate subsidiary named Halmslätten Midco 1 AB, corporate identification number Halmslätten Midco 1 AB was registered with the Swedish Companies Registration Office on 31 October 2018 and has one fully owned and immediate subsidiary named Halmslätten Midco 2 AB, corporate identification number Halmslätten Midco 2 AB was registered with the Swedish Companies Registration Office on 31 October 2018 and has two fully owned and immediate subsidiaries, the BidCos. The BidCos are Swedish limited liability companies, registered with the Swedish Companies Registration Office on 31 October The registered address of each of the Subsidiaries is P.O. 7415, SE Stockholm. The objects of the Subsidiaries are to manage fixed and movable property or manage companies that directly or indirectly own fixed and movable property and collect funding for its business and conduct business related thereto. The immediate subsidiaries of Halmslätten Midco 2 AB, the BidCos, are the direct owners of each of the Targets. The Targets will merge into the BidCos post Closing of the Transaction. The BidCos and the Targets are the borrowers under the Debt Facility. The Share Purchase Agreement for the acquisition of the Targets was entered into on 10 December 2018, with the Vendor as seller and the BidCos as purchasers. 6.4 The Targets The Targets are the Swedish limited liability companies Vrangelsro 5:4 Fastighets AB with corporate identification number , registered with the Swedish Companies Registration Office since 11 October 2007 and AxLogistik Nord AB with corporate identification number , registered with the Swedish Companies Registration Office since 28 November The registered address of the Targets is P.O. 7415, SE Stockholm. The object of each Target Company is to directly or indirectly purchase, sell and manage real estate and conduct business related thereto. The Targets were acquired by the Vendor as off the shelf companies and the only active shareholder prior to the Transaction is the Vendor. The Targets will merge into each buying subsidiary. 28

29 6.5 Transaction and Group structure The Transaction was structured as an acquisition of 100% of the shares in the Targets by the BidCos, with the Company as the indirect owner. The Targets are the sole owners of the Properties. The group structure before the Transaction is illustrated below. Group structure before Transaction Source: the Vendor The group structure after the Transaction is illustrated below. Group structure post Transaction The BidCos Source: the Company 29

30 The Share Purchase Agreement was signed on 10 December 2018 with Closing on 14 December The Share Purchase Agreement was negotiated between representatives of the Company, on behalf of the BidCos, and representatives of the Vendor. The main elements in the Share Purchase Agreement have been structured as follows: The acquisition was carried out by means of a transfer of 100% of the shares in the Targets The purchase price was based on the Agreed Portfolio Value of SEK 1,084,000,000 and was paid upon Closing The purchase price is subject to auditing and adjustment 45 business days after Closing The purchase price payable on Closing was a preliminary amount based on a pro forma balance sheet and the final purchase price will be calculated based on the closing accounts to be prepared by the Vendor and reviewed by the Targets auditor and the Company following Closing. All existing internal loans of the Targets were repaid by the BidCos, on behalf of the Targets, at Closing. The Share Purchase Agreement contains warranties regarding, inter alia, the Targets, the Portfolio, the Lease Agreements, tax and disputes; warranties collectively deemed by the Group and its legal advisors to be in line with Swedish market practice with customary limitations regarding the Vendor s liability for breach of warranties and in respect of thresholds and time limits for making claims. 6.6 Contact information The Company s contact information is stated below. Address: Halmslätten Fastighets AB (publ) c/o Pareto Business Management Box Stockholm Sweden Phone: Pareto Business Management: LEI: W0FMXWQ2LUC53 Website: 30

31 7 THE PROPERTIES Unless otherwise explicitly stated, the Vendor is the source of all information contained in this section. 7.1 General overview The Portfolio consists of two logistics properties located in Halmstad and Umeå. The Properties are modern and perceived to be energy efficient and specifically built for the Tenant in 2009 and 2015, respectively. The Portfolio comprises a total lettable area of approximately 72,985 square metres. Halmstad Vrangelsro 5:4 is the largest of the two Properties and covers approximately 68% of the total lettable area in the Portfolio and Umeå Logistiken 3 covers approximately 32% of the total lettable area in the Portfolio. The Properties are fully let to the Tenant, with a remaining lease term, as of 1 October 2018, of approximately 15.1 years regarding Halmstad Vrangelsro 5:4 and approximately 12.3 years regarding Umeå Logistiken 3. Most of the warehouse premises are refrigerated and frozen premises (Sw. Kyl- och fryslager) and split into different temperature zones ranging from -24 to 8 degrees celsius. Each of the two Properties are modern and designed for energy efficiency. For example, both Properties are fully self-sufficient in heating through heat recycling from the cooling systems, and Umeå Logistiken 3 is fitted with both rooftop solar panels and motion sensor LED light fixtures to optimise energy consumption. Both Properties have environmental certificates according to BREEAM. The property Umeå Logistiken 3 has a certificate from 2018 and the property Halmstad Vrangelsro 5:4 has a certificate from The estimated annual rent for the year 2019, including a running supplement in Umeå Logistiken 3 for tenant improvements, is estimated to approximately SEK 58.9 million, corresponding to approximately SEK 807 per square metre. The Lease Agreements are 100% adjusted in accordance with Swedish CPI. The NOI of the Portfolio is estimated to amount to approximately SEK 57.2 million, equivalent to a Net Real Estate Yield of approximately 5.3%. Portfolio location Umeå Halmstad Source: the Vendor and the Manager 31

32 7.2 Portfolio Summary A summary of the Portfolio is presented in the table below. Property description - Summary Halmstad Umeå Registred property Vrangelsro 5:4 Logistiken 3 Tenure Freehold Freehold Address Fraktgatan 2 Godsvägen 12 Lot size, m² 172,588 76,735 Leaseable area, m² Approximately 49,980 Approximately 23,005 Occupancy rate, % Construction / Re-development Environmental certification BREEAM Pass (2010) BREEAM Very good (2018) No. of loading docks Maximum storage height, m Source: the Vendor Type of premises, by area Halmstad 9% 4% 12% Umeå 3% 21% 37% 19% 35% 29% 31% Warehouse (refrigerated) Warehouse (colonial) Warehouse (frozen) Office/canteen/staff premises Other Warehouse (refrigerated) Warehouse (colonial) Warehouse (frozen) Office/canteen/staff premises Other Source: the Vendor s broker (Nordanö) 32

33 7.3 Halmstad Vrangelsro 5:4 Halmstad Vrangelsro 5:4 is located on Fraktgatan 2 in Halmstad, a municipality along the western coast of Sweden. The property was constructed for the Tenant in 2009 and it has been awarded the environmental certification Pass by the international rating agency BREEAM in The total lettable area of the property is 49,980 square meters, making it Martin & Servera s largest logistics facility. It serves as an inbound delivery hub and a buffer warehouse for the entire operation. The property is fully let to Martin & Servera Logistik AB, a company within the Martin & Servera group. The lease agreement has a tenure of 15 years without any break options and expires in October Due to the size of the Property, it plays an important role in Martin & Servera s logistic supply-chain. Selection of pictures of the property Halmstad Vrangelsro 5:4 Source: the Vendor 33

34 Floorplan The majority of the lettable area in Vrangelsro 5:4 comprises of refrigerated and frozen premises that are split into various temperature zones, specifically designed to meet the needs of the Tenant. The colonial premises are tempered below 18 degrees celcius, the refrigerated premises between 4-8 degrees celcius and the frozen premises approximately -24 degrees celcius. The property also includes a minor share of office premises, a canteen and dressing rooms. The facility also accommodates a Martin & Servera sales office. The inbound deliveries of products that are stored in the colonial or refrigerated warehouse premises are received at the eastern wing of the facility and the outbound deliveries are transported from the western wing of the facility. The products that require storage in frozen premises have both an inbound and outbound delivery point at the northern wing of the facility. The office and staff premises are located on a split-level floor. The unbuilt area between the refrigerated and frozen premises may allow for an expansion of the building in case the Tenant would require additional area for its operations in the future. Floorplan in Halmstad Vrangelsro 5:4 4-8 <18-24 Inbound delivery Outbound delivery Source: the Vendor 34

35 Building description The property is built to a high technical standard with an energy efficient design. The cooling system in the property is advanced, capable of regulating the different sections of the property to exact temperatures, and heat recycling from the cooling system provides the property with full self-sufficiency in heating. To further improve the energy efficiency of the property, the building features a construction with minimal air and temperature leakage, and motion sensor light fixtures. The property was environmentally certified in 2010 according to BREEAM, with a rating of "Pass". Building description Halmstad Vrangelsro 5:4 General Construction year, incl. reconstruction/refurbishment No. of floors above ground No. of floors below ground Garage/parking Completed 2009, unused space on split-level floor was refurbished in split-level floor 1 (sprinkler central) Ground parking, approximately 300 spaces No. of entrances 1 Environmentally certification Breeam Pass (2010) Technical specifications Foundation Framework Roof Facade Plinth foundation with edge beam (Sw. Kantbalk) Hollow core (steel/concrete) Roofing felt and membrane Sandwich elements Windows Aluminium, triple-glazed insulating glass, U-value 1.1 No. of loading docks Load bearing capacity Floor-to-ceiling heights Balconies/terraces 54 quick-rolling gates (Sw. Snabbrullportar), 4 sectional doors (Sw. Takskjutportar), 71 weather protected loading docks Dimensioned for 50kN/m² concentrated loads and 20 kn/m² distributed loads. Hollow core capacity of 0,5 kn/m² Maximum loading height 10.2 metres 1 outdoor terrace Installations Heating Ventilation Cooling Air and waterborne, recycling from cooling system and separate heating pump FTX Comfort cooling via ventilation in office and staff premises Lifts 2 elevators: Kalea ROC, 225 kilos and Kalea A4, 400 kg, both from 2009 Sprinklers and fire alarm Electricity Sprinkler and fire alarm connected to the Swedish Emergency Services (Sw. Räddningstjänsten) High voltage (Sw. Högspänning) Source: the Vendor 35

36 Location Halmstad municipality is located in the Halland region. Halland comprises of six municipalities and it has more than 320,000 inhabitants, making it the 7 th highest populated region in Sweden. Halmstad is located next to the Nordic Trade Triangle. The Nordic Trade Triangle is a logistic network of roads, railways, airports and ports connecting Stockholm, Oslo, Helsinki and Copenhagen as well as it establishes a transportation link between the Nordic cities and the rest of Europe. Being located in close proximity to the Nordic Trade Triangle ensures efficient transportation of goods across entire Europe, a feature beneficial for logistics facilities. In addition to the Nordic Trade Triangle, the railway connection the West Coast line passes through Halmstad. The West Coast line is also connected to the Markaryd line which is a railroad mainly designed for freight trains. Apart from the railway structure, Halmstad has access to major European highways such as E6 and E4, as well as a full-service port for sea freight traffic. Due to Halmstad being equipped with infrastructure for transportation, in addition to being located in between the cities Gothenburg and Helsingborg, the area has been awarded 9 th place by Intelligent Logistik in their ranking of the best areas for logistic facilities in Sweden. Intelligent Logistik is a newspaper with 13 years of experience researching the Swedish logistics sector. Location of the Halmstad Vrangelsro 5:4 E6 Halmstad Vrangelsro 5:4 Selection of corporates in the area E6 HALMSTAD E6 E6 Source: Pareto 36

37 7.4 Umeå Logistiken 3 Umeå Logistiken 3 is located on Godsvägen 12 in Umeå and comprises approximately 23,005 square metres of lettable area. Umeå is a municipality in northern Sweden within close proximity to the Gulf of Bothnia. Umeå Logistiken 3 is a logistics property which was completed during 2015 and it has been awarded the environmental certificate BREEAM Very Good in The remaining lease term is approximately 12.3 years, as of 1 October 2018, without break options and the lease term expires in January The property enables Martin & Servera to reach customers in the northern parts of Sweden and Finland within a timeframe of 24 to 48 hours. Selection of pictures of the property Umeå Logistiken 3 Source: the Vendor 37

38 Floorplan The floorplan in Umeå Logistiken 3 is very similar to Halmstad Vrangelsro 5:4 and comprises of refrigerated and frozen premises that are split into various temperature zones, specifically designed to meet the needs of Tenant. The colonial premises are tempered below 18 degrees celsius, the refrigerated premises between 4-8 degrees celsius and the frozen premises approximately -24 degrees celsius. The property also includes a minor share of office premises, a canteen and dressing rooms. The inbound deliveries of products that are stored in the colonial or refrigerated warehouse premises are received at the southern wing of the facility and the outbound deliveries are transported from the northern wing of the facility. The products that require storage in frozen premises have both an inbound and outbound delivery point at the northern wing of the facility. The office and staff premises are located on a split level floor. The unbuilt area between the refrigerated and frozen premises may allow for an expansion of the building in case the tenant would require additional area for its operations in the future. Floorplan in Umeå Logistiken <18-24 Inbound delivery Outbound delivery Source: the Vendor 38

39 Building description The property Umeå Logistiken 3 was specifically designed for energy efficiency. The cooling system in the property is highly advanced, and provides full self-sufficiency in heating through recycling from the cooling system. The building also includes 650 rooftop solar panels generating nearly 200,000 kwh per year, motion sensor LED light fixtures, and a construction with minimal air and temperature leakage. The property is environmental certified according to BREEAM, with a rating of "Very Good", in Building description Umeå Logistiken 3 General Construction year, incl. reconstruction/refurbishment No. of floors above ground No. of floors below ground Garage/parking Completed split-level floors 1 (sprinkler central) Ground parking, approximately 200 spaces No. of entrances 1 Environmentally certification Breeam - Very good (2018) Technical specifications Foundation Framework Roof Facade Plinth foundation with edge beam (Sw. Kantbalk) Hollow core (steel) Roofing felt and membrane Sandwich elements Windows Aluminium, triple-glazed insulating glass, U-value 1.1 No. of loading docks Load bearing capacity Floor-to-ceiling heights Balconies/terraces 52 quick-rolling gates (Sw. Snabbrullportar), 36 weather protected loading docks Dimensioned for 50kN/m² concentrated loads and 20 kn/m² distributed loads. Hollow core capacity of 0.5 kn/m² Maximum loading height 11.2 metres 1 outdoor terrace Installations Heating Ventilation Cooling Lifts Sprinklers and fire alarm Electricity Air and waterborne, recycling from cooling system and separate heating pump FTX Comfort cooling via ventilation in office premises 2 elevators: Bravida Bigspace, 1000 kg and Cibes A5000, 400 kg, both from 2015 Sprinkler and fire alarm connected to the Swedish Emergency Services (Sw. Räddningstjänsten) Medium voltage (Sw. Mellanspänning) Source: the Vendor 39

40 Location Umeå municipality is located northern Sweden. Umeå has more than 125,000 inhabitants, making it the largest municipality north of Stockholm and is often referred to as the capital of Northern Sweden. Umeå is a key location for companies that conduct businesses in the northern parts of the country. The Bothnian Corridor is a transnational transportation system connecting Sweden, Finland and Norway. Most of the corridor runs along the Bothnian Gulf and stretches from Jönköping in southern Sweden, to the Finnish boarder in the northeast and the Norwegian boarder in the northwest, covering more than 2/3 of the country. The transportation system currently consists of single track railways, resulting in capacity constraints. However, several projects designed to support and expand the railways are planned. Norrbotniabanan, a new railway extension between Umeå, Luleå and Haparanda, is one of the major ongoing projects. The Bothnian Corridor runs through Umeå, connecting the municipality with southern Sweden as well as Norway and Finland. Apart from being located next to the Bothnian Corridor, Umeå has one of the most modern freight train yards in Sweden, access to E4 and E12 and one of the largest container ports in the Nordic region. The various means of transportation available enhance transportation of goods to and from the municipality. As such the location is well suited for logistics facilities. Location of Umeå Logistiken 3 Selection of corporates in the area Umeå Logistiken 3 E12 E12 Västerslätt s industrial area E4 UMEÅ E4 20 km Source: Pareto 40