Signa’s portfolio value shrinks from 3 to 2.1 billion euros
Published: Thursday, Nov 16th 2023, 15:21
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At the real estate and retail company Signa, owned by Tyrolean René Benko, it is not only the important portfolio real estate division, Signa Prime, that is deeply in the red. According to the German news magazine "Der Spiegel", the company's own development company Signa Development is also posting high losses.
As a result, the value of the portfolio as a whole fell from almost 3 billion euros to 2.1 billion euros (2.0 billion Swiss francs) in the first half of 2023 due to sales and devaluations, reports the magazine online. The Signa Group owns half of the Globus Group in Switzerland.
At the request of the Austrian news agency APA, Signa has not yet issued any further statement. "Very responsible discussions are currently underway with stakeholders, which make us confident that we will find good solutions", a Signa spokesperson emphasized in a statement requested by APA on the EUR 2 billion financing requirement until mid-2024 Thursday morning.
Numerous organizational, structural and personnel processes have been set in motion to support the Signa Group and stabilize it sustainably and in the long term. This includes both the real estate and retail sectors.
Millions lost in the development division
According to Der Spiegel, Signa Development accumulated a net loss of almost 150 million euros in the first half of 2023. This is shown in a presentation by Signa for investors, which was made available to the news magazine.
The Signa subsidiary was particularly affected by the sharp decline in the value of its real estate portfolio. The portfolio of the development division was devalued by 190 million euros. In addition, the company is selling properties in order to raise money.
Car dynast Robert Peugeot, major Strabag shareholder Hans Peter Haselsteiner and the RAG Foundation hold large stakes in the Development division. Swiss-based logistics billionaire and Signa Prime shareholder Klaus-Michael Kühne recently bought the Berlin office project Beam from the Development division.
According to the magazine report, Signa Development already slipped deep into the red in 2022. The bottom line was a loss of 317 million euros - in the previous year, a profit of 281 million euros had been achieved with the project development of buildings.
Lower valuation of properties
One of the main reasons: the properties were valued at 365 million euros lower. In previous years, on the other hand, profits could have been reported due to rising property values.
The rating agency Fitch recently warned of the risk that Signa could have transferred funds from the development subsidiary to other parts of the group. Fitch downgraded the rating for Development to "high risk", not least because the Signa subsidiary's cash and cash equivalents had shrunk from 125 million to just 32 million in the first half of the year.
Due to the shortage of liquidity, the plan to buy back bonds in the second half of 2023 has been canceled, Signa's management made clear in the investor presentation. The project developer had raised 300 million euros via a bond on the capital market.
Key elements are now "transparency and validation by third parties", the company management emphasized. It was precisely the lack of transparency in the Signa Group's convoluted structures that had recently made investors skeptical.
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