Cash is King

Stena Finance’s main task is to manage the funding requirements of the Stena Group, both long and short term. Put simply, it’s a matter of ensuring that the group always has enough money.

Historically, the ability to borrow money for expansive investments has been a very important success factor for Stena. A pre-requisite for a capital-intensive company such as Stena is good relations with banks and other players willing to lend money. As a compliment to bank financing, money is also borrowed on the European and US bond markets. Stena issued its first bond in 1995 and through the years, has issued bonds for a total of SEK 17 billion. Initially, the US investors were sceptical of investing in a conglomerate that was exposed to the real estate sector. Today, it is quite the reverse.

“Today’s investors set a high value on the fact that we have expanded a lot in the real estate sector, they regard this as mitigating the consequences of the volatile market currently being experienced by, for example, Stena Drilling”, says Rolf Mählkvist, Deputy Managing Director, Stena Finance.

As part of its work on maintaining good relations with lenders/investors, Stena Finance regularly participates in different financial conferences. At these conferences, the company meets investors, most often in one-to-one meetings where they are given updates and the opportunity to ask questions.

“Many lenders/investors obviously ask how we view the drilling market and if we see any improvement. The fact is that activity among the oil companies has increased in recent weeks”, says Peter Claesson, Director of Finance, Stena AB.

Many investors are very impressed by Stena and in particular they appreciate the Group’s diversification. The fact is that exposure to different industries is, at the same time, a challenge for the investors intending to analyse Stena. The meetings are very much a matter of giving investors a sense of security and being able to explain the challenges facing Stena.

At the most recent conference in Miami, arranged by the bank JP Morgan, more than 200 companies were represented together with over 1,000 investors from different funds and institutions.

“Bringing together lenders and borrowers under the same roof creates unique prerequisites. We attracted a large number of investors and there was great interest in Stena”, says Peter Claesson.


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December 2020