Serneke has reached an agreement-in-principle with Oaktree Capital Management (“Oaktree”) to divest 80 per cent of Karlatornet, situated on the Karlastaden estate in the Lindholmen area of Gothenburg. Serneke will remain as a shareholder in Karlatornet and continue to act as main contractor for the construction of the tallest building in the Nordic region.
“This agreement naturally represents a huge milestone for the continued development of Karlastaden and for all of Serneke. This is something we have worked extremely hard to achieve for a long time. We are very pleased that we have reached a principle agreement with Oaktree that, once closed, offers a robust financial solution and a high-quality realization of the Karlatornet project,” says Ola Serneke, CEO of Serneke Group.
Oaktree and Serneke will, according to the agreement-in-principal, co-own and jointly develop the Karlatornet project into a unique destination in Gothenburg, composing about 95,000 square meters and more than 600 residential apartments, a 300-key Clarion Choice Hotel, more than 8,000 square meters of office and retail spaces and an observation deck. The total project value is estimated to exceed SEK 6 billion.
Oaktree is an international investment company with operations in 14 countries worldwide and headquarters in Los Angeles. With total capital under management of about USD 120 billion, Oaktree has an extensive experience of high-end real estate development projects.
Serneke will continue to act as main contractor for the Karlatornet project and enter into a turn-key contract with an order value in excess of SEK 3 billion, which will be added to Serneke’s order backlog in the quarter the transaction closes. The transaction is expected to have a positive effect on operating profit and generate positive cash flow.
Closing of the transaction is conditional upon finalization of senior financing and transaction documentation and customary conditions that are all due to be completed during the first months of 2020. Serneke and Oaktree have agreed financing terms with an international bank regarding the senior financing, which will provide all remaining funds to complete the project.
Source : Serneke Group