Globus co-owner Benko hands over power at Signa to restructurer
Published: Wednesday, Nov 8th 2023, 16:00
Updated At: Thursday, Nov 9th 2023, 00:54
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Billionaire René Benko had built up his real estate group with the help of low interest rates and financially strong investors. Recently, the negative reports have been piling up. Now a restructurer is taking the helm.
As a 17-year-old, René Benko was already earning good money by converting attics in his home town of Innsbruck. This was later followed by a fairytale rise to real estate tycoon, who became super-rich with skyscrapers, shopping centers and other buildings in prime locations. The US magazine Forbes estimates the 46-year-old's fortune at 5.6 billion euros.
In times of extremely low interest rates, his business was doing brilliantly. Now his Signa Group, founded around 20 years ago, is ailing. On Wednesday, Benko handed over his power to the German restructurer Arndt Geiwitz under pressure from his co-shareholders.
As the company announced, Benko is stepping down as Chairman of the Advisory Board of Signa Holding. Geiwitz will also take over as Chairman of the Shareholders' Committee and will be responsible for the restructuring of the real estate and retail holding company. "In the current situation, this is the best solution for the company, its partners, investors and employees," said Benko according to the press release.
Restoring trust
The task now is to restore trust. Signa's real estate portfolio remains unique. All parties involved are called upon to support Signa now.
Geiwitz said that the company needed calm and order. Long-term solutions needed to be found. "It is therefore both responsible and necessary to initiate a comprehensive consolidation for the company now." The quality of the real estate portfolio and the planned projects, particularly in Germany, is very good.
Signa is building the 245 meter high Elbtower in Hamburg, for example. The group also includes the department store group Galeria Karstadt Kaufhof, which has already been through two insolvency proceedings. The most recent proceedings were conducted under Geiwitz's leadership.
Half of the Globus Group also belongs to the Signa empire. In summer 2020, Migros sold its shares to Benko and the Thai Central Group.
Higher interest rates, higher costs
Since the beginning of the war in Ukraine, the real estate sector has had to contend with increased construction and energy costs as well as higher interest rates. Due to the rise in interest rates, Signa Prime Selection recorded a write-down of 1.17 billion euros in the previous year. This mainly affected properties in Germany, as can be seen from the consolidated financial statements of the luxury real estate holding company.
Signa has engaged additional external consultants to review all business areas at full speed and to develop a holistic concept for the Group, it said.
According to the Austrian shareholder Hans Peter Haselsteiner, Benko's co-owners of the holding company had asked the billionaire to relinquish power over the company network after problems had accumulated in various divisions and projects. The Signa sporting goods division, for example, filed for insolvency in October. The construction of the Elbtower was interrupted.
Financially strong investors
The 46-year-old Benko had also built up his group of companies with the help of financially strong investors. Previous co-owners of the Signa holding company included the foundation of the Austrian construction company family Haselsteiner (Strabag) and Ernst Tanner, Chairman of the Board of Directors of the Swiss chocolate manufacturer Lindt & Sprüngli.
The logistics entrepreneur Klaus-Michael Kühne is one of the shareholders in Signa Prime Selection.
In Austria, the Signa Group recently sold the operating business of the Kika/Leiner furniture group. The retailer filed for insolvency shortly afterwards.
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