The transaction gives SBB a much-needed cash infusion after scrapping a share issue earlier this week when ratings agency S&P Global downgraded the company's debt to so-called junk status.

Rising interest rates, soaring inflation and growing debt have hit real estate companies in Sweden, which the country's policymakers see as a risk to financial stability.

SBB's share price is down 62% year to date.

The company said it had sold 19 million shares in JM, corresponding to a stake of 29.5%, at a price of 148.1 Swedish crowns per share, reducing SBB's stake to just 2.9%.

"The sale enables a focus on the company's core business and a further strengthening of SBB's financial position," SBB founder and CEO Ilija Batljan said in a statement.

While SBB had said it continued to work on potential asset sales, its chairman had recently denied in a newspaper interview that it would divest from JM.

Skandinaviska Enskilda Banken AB (SEB) acted as sole global coordinator and bookrunner in the share sale, SBB said.

($1 = 10.1526 Swedish crowns)

(Reporting by Terje Solsvik, Louise Rasmussen)