First anniversary of Elbtower construction freeze and Signa Sports bankruptcy
Published: Sunday, Oct 27th 2024, 08:20
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The halt to construction on the Elbtower skyscraper in Hamburg and the insolvency of the sports webshop group Signa Sports United on October 27, 2023 were the first dominoes to fall in the decline of Réné Benko's Signa real estate group. One year later, the construction site in Hamburg is still at a standstill.
The German construction company Lupp stopped work on Hamburg's prestigious HafenCity project exactly one year ago due to outstanding payments from Signa. The Elbe Tower was to be 245 meters high, but the shell is currently around 100 meters high. Signa had estimated the total costs at the start of construction at 1 billion euros. The project was officially halted in January 2024 because the Elbtower company also filed for insolvency following the insolvency of its flagship Signa Prime.
Time for a solution is pressing
An investor solution for the Elbtower is to be found soon. "We still have until October 31, by which time our consortium would like to make the insolvency administrator a purchase offer for the Elbtower," Hamburg real estate entrepreneur Dieter Becken recently told the German newspaper Abendblatt. Signa investor and logistics billionaire Klaus-Michael Kühne also expressed an interest in completing the Elbtower with a consortium in the summer.
Following the insolvency of Signa Holding at the end of November 2023 and Signa Prime and Signa Development at the end of December 2023, the construction site for the Lamarr department store and hotel project in Vienna has also come to a standstill. Viennese investor Georg Stumpf only recently took over the unfinished Signa construction project in Vienna's Mariahilfer Strasse - for EUR 100 million, according to the "Kurier" newspaper.
In addition to the large-scale real estate projects, the Signa Group also acquired financial interests in its retail business, including Galeria Karstadt Kaufhof, SportScheck and Signa Sports United. Together with the Thai Central Group of the Chirathivat family, Signa held stakes in Globus in Switzerland, KaDeWe in Berlin and Selfridges in the UK.
Signa Sports United included the retailers Tennis-Point, WiggleCRC, Fahrrad.de and Bikester, among others. With 80 online stores, the company achieved annual sales of 1 billion euros at its peak, but reported a loss of 180.5 million euros in mid-2023. Tennis-Point, WiggleCRC, Fahrrad.de and Bikester were sold as part of the insolvency proceedings.
Signa Sports United was registered as a public limited company in the Netherlands, but was headquartered in Berlin and listed on the New York Stock Exchange. Since the IPO in 2021, the valuation has shrunk from 3.2 billion dollars to almost zero at the IPO in October 2023.
Claims for damages
Shareholders of the insolvent Signa Sports United (SSU) initiated proceedings at a court in Amsterdam in the spring. The German Association for the Protection of Securities Ownership (DSW) and Dutch investor advocates are seeking compensation in court for shareholders they believe have suffered losses.
The insolvency claims registered by creditors in Austria against Signa companies and Benko as an entrepreneur as well as the Benko Private Foundation recently amounted to over 25 billion euros. However, only a fraction was recognized by the insolvency administrators. Other Signa companies in Germany, Luxembourg and Switzerland are also insolvent.
©Keystone/SDA
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