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Laeringsverkstedet & SBB

Dear Esteemed Recipients,

We refer to our preliminary correspondence dated March 1, 2022, in relation to the above matter.

On March 4, 2022 Laeringsverkstedet (LV) published a letter to the Norwegian Ministry of Education aiming to clarify their sale-and-leaseback agreement with SBB. The letter clarifies the situation perfectly, confirming that things are far worse than we had projected in our original letter.

  • According to LV it is Laeringsverkstedet’s owners that receive the D-share dividend. This is a moot point. It does not matter which entity in the LV Group receives consideration for sale of assets as they are wholly owned businesses and substantially all the business is the operation of kindergartens under the LV brand.
  • LV’s response simply states that there will be no direct benefit from D shares at the operational level, which leaves it in an awkward position where it will either:
    • Incur losses and be floated by (for example) loans from the parent company
    • Generate profits floated by the Norwegian taxpayer in what is an undoubtedly lucrative but morally bankrupt loophole in Norway’s kindergarten financing.
  • It is a logical fallacy to suggest that their NOK ~250m per year lease, on top of all the triple-net lease expenses one would occur as a landlord could be somehow comparable to the costs of just being a landlord (even when considering LV’s previous mortgage/debt expenses).
  • The letter brings up the recent increases in construction costs for kindergartens. We are unsure why this is included as SBB is not building new kindergartens for LV.

As Viceroy have previously stated we believe that SBB’s reason for this transaction is to record artificial one-time revaluations of these properties based on their inflated rent.

Please do not hesitate to contact us if you have any questions regarding the below.

Yours faithfully


Viceroy Research

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