Billionaire Benko’s Signa Holding is insolvent
Published: Wednesday, Nov 29th 2023, 13:40
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The umbrella company of the Signa empire, Signa Holding GmbH, owned by Tyrolean billionaire René Benko, filed for insolvency at the Vienna Commercial Court on Wednesday, as confirmed by the creditor protection association KSV1870. A restructuring procedure with self-administration is being sought, the real estate group said on Wednesday.
The aim of the insolvency proceedings is an "orderly continuation of business operations and restructuring". Rising interest rates and construction costs as well as falling property valuations triggered the bankruptcy.
"Despite considerable efforts in recent weeks, it has not been possible to secure sufficient liquidity for an out-of-court restructuring," Signa announced this morning. Together with the insolvency administrator to be appointed by the court, the liabilities are to be reorganized and the value of the investments preserved, according to the statement.
Numerous international investments
Signa owns building portfolios worth billions - including the Tyrol department store in Innsbruck, real estate in the center of Vienna and abroad, such as the Deutsche Börse building in Eschborn, the Hotel Bauer Palazzo in Venice and a half share in the Chrysler Building in New York.
Signa and the Central Group from Thailand each hold half of the shares in the Swiss department store chain Globus. They acquired the department store and its real estate from Migros in 2020.
More and more construction stops
Construction work on the Elbtower in Hamburg recently had to be halted because, according to the construction company, Signa did not pay on time. Recently, construction work also came to a halt on the Alte Akademie in Munich's prime location - the mayor of Munich immediately put all Signa projects and plans in the city on hold.
It is unclear how the major Lamarr construction site in Vienna's Mariahilfer Strasse will continue. The luxury department store was due to open in 2025. "The Habau Group has completed 99 percent of the construction work - further steps are currently being evaluated," the construction company commissioned with the project announced on Wednesday in response to an APA inquiry.
Real estate sector burdened by external factors
Signa justified its decision to file for bankruptcy by stating that the Group's retail division, and in particular the over-the-counter retail business, had come under severe pressure. Signa's investments in this area had not brought the expected success.
In the real estate sector, "external factors" have recently had a negative impact on business development. Despite considerable efforts, the company was unable to secure the necessary liquidity required for out-of-court restructuring, the company explained.
High financial requirements in the short term
According to media reports, Signa would have needed around 500 million euros in the short term. A 200 million euro bond matures at the end of November. A further 1.5 billion euros would have been needed by the middle of next year. Billions are owed to banks - reportedly around 2.2 billion in Austria alone.
Cracks have recently appeared in the Benko empire: after Signa Sports United became insolvent in October, the German subsidiary Signa Real Estate Management Germany filed for insolvency at the Charlottenburg district court in Berlin last Friday. Insiders assume that further insolvencies of Signa companies in Germany will follow.
In KSV's view, the Signa Group has "lost a great deal of trust in recent months due to the very limited communication with the outside world". In view of the large number of direct and indirect investments in several countries, the insolvency administrator faces "a Herculean task".
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