Billion-Crown Injection for Stegra Is Costly for Pension Savers

Crisis-stricken Stegra manages to stay afloat for a while longer. This is clear after a consortium including the Wallenberg family invests SEK 15 billion in the company. At the same time, it has become evident that Stegra’s crisis will be costly for the country’s pension savers.

Stegra has reached a preliminary agreement for new financing of €1.4 billion from a combination of new and existing investors, aimed at completing the construction of the company’s large-scale green steel facility in Boden. The company announced this in a press release on Tuesday.

“The financing reflects the strong confidence in Stegra’s business model from both new and existing investors, as well as from our lenders. Reaching this agreement in a very challenging macroeconomic environment is the result of significant efforts by all involved, including investors and banks, but also the team at Stegra and our wider network of suppliers, customers, and other close partners in Boden,” says Henrik Henriksson, CEO of Stegra.

The new funds will be used to complete the construction of the facility in Boden.

“We are convinced of Stegra’s competitiveness and the commercial viability of green steel, in addition to its climate advantages, even as we are fully aware of the challenges that remain. We also believe that the project is of great importance for Sweden’s position as an industrial nation,” says Leif Johansson, advisor to the consortium led by Wallenberg Investments.

Two Pension Billions

The Wallenberg family stepping into the company means a more secure financial foundation for Stegra but also represents a financial setback for existing shareholders, whose holdings are being diluted. One of the losers is AMF, which has invested SEK 2 billion and held just under six percent of the company’s shares.

“AMF has invested a total of about SEK 2 billion in Stegra, and we are satisfied with the size of our investment. The fact that we’ve been able to help the company secure a financing solution feels good, especially as it benefits our pension savers and allows the company to focus on getting operations up and running,” says Katarina Romberg, Head of Asset Management at AMF.

However, talking to TV4, Romberg says something different.

“Of course there will be dilution, and we haven’t calculated exactly to what extent yet. It’s an investment that hasn’t gone according to plan. But at the same time, it was almost expected—investments of this kind in the early phase rarely follow the plan.”

Despite the dilution, Katarina Romberg claims that AMF still has reason to be satisfied with the investment in Stegra.

“Our task is not to support the green transition, but to secure a high return for our savers. Here we need to be long term, and it’s too early to evaluate Stegra yet.”

Previously, AMF also invested almost SEK 2 billion in Northvolt—money that was lost.