Scandinavian Credit Fund I AB (publ) reports a NAV price for June of 56.84. In total, assets have decreased by approximately -1.50% since the previous month. The fund's managed capital amounts to SEK 1,534 million at the end of the month.
The month's decline in NAV can mainly be attributed to the fund's provisions according to IFRS 9, which increased during the month, as well as the fund's listed and unlisted shareholdings. The increase in provisions is attributable to a move of one of the fund's commitments to category 3 when one of the companies failed to pay the agreed interest on time and thus demonstrated an increased risk. The fund acted immediately upon signs of payment difficulties in order to defend its rights and collateral and maintains an ongoing dialogue with the company in order to ensure full repayment.
The listed shareholdings decreased by approximately SEK 3.6 million. However, we view the underlying development in these companies positively and expect this to be reflected in the share price going forward.
As previously described, the fund is affected by the movement of the Swedish krona against other currencies the fund is exposed to. The monthly development of the USD, as shown in the table below, affected the fund's unlisted shareholdings negatively. Approximately 20% of the fund's value is currently exposed to USD, as shown in the distribution below.
*) As mentioned in previous monthly newsletters, the fund has stopped hedging its holdings as it was considered too expensive and that it also has liquidity effects in connection with the realization of the currency futures. The outcome of the portfolio is affected after we stopped hedging both up and down depending on how the currencies change.
Loans and shares in the portfolio before reserves are distributed in underlying currencies as below.
According to the model that the fund applies for reserving loans, the reserve per category is as follows.
The closing reserve as of June 30 amounts to -262.8 million SEK, compared with the reserve in May, which amounted to -256.2 million SEK.
Events during the month
We had expected a repayment of a loan that was scheduled for the beginning of June. The borrower who sold parts of the business has been waiting for payment from the buyer who in turn has not been able to raise the intended financing. The borrower has found a new buyer but it will be some time before the deal is definitely completed. We can therefore repay ourselves as planned and may return later.
In previous monthly letters, we have informed about a case that the fund is pursuing with the help of the Swedish Enforcement Authority. The owner of the company to which the fund has lent has given personal guarantee for the company's obligations. The Swedish Enforcement Authority has now completed the seizure of the owner's property and has seized movable property and three properties. An auction of the movable property has begun. If the assets are sold for the value assessed by the Swedish Enforcement Authority, the fund will be largely repaid for our entire claim, but not more than approximately SEK 7 million.
Regarding the ongoing lawsuit process in Denmark. The fund has sued previous management and auditors. The fund is actively working on the process and will return when we have more information.
The fund via Riddargatan SPW W has entered into transfer agreements for two of the large apartments in Björnrike during the month. Occupancy is expected to take place during July. Our broker is working on the sale of the remaining apartments in Vemdalen. The market during the summer months is somewhat calmer, but we see potential going forward and are working on selling the entire project. Advertising is available on Hemnet and the broker's website.
Work on the properties in Norrtälje and Hallstavik is ongoing and the project with the ventilation at the district dental care is now underway during the summer. As we previously informed, one of the tenants in Pelikanen has terminated his lease. We have tried to renegotiate but the tenant has chosen to change premises. The matter was handled by the rental committee and the agreement now runs until August 31, 2026. Active work is underway to find a new tenant for the premises. The plan is, as before, to resume contact with the broker during Q3 and then primarily with the sale of the property in Hallstavik.
The development in some of the unlisted companies that the fund has realized remains good. However, one of the holdings has had a weaker development during the last two months. We hope that the development will turn around so that the forecast for 2025 can be fulfilled.
During the month, the fund's responsible manager held an information meeting digitally, which is now available on the fund's website, kreditfonden.se. The purpose was to answer questions received to the best of our ability, provide an overview of the work on the winding-up and provide an indication of the timeline for the winding-up.
Repayment of capital
We will get back to you with more information as soon as we can.
More information and Q&A is available on the Fund's website: https://kreditfonden.se as well as in previous monthly newsletters.
