Crisis at Signa Group: Galeria considers suspending rent payments
Published: Saturday, Nov 25th 2023, 11:50
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According to media reports, the German department store chain Galeria Karstadt Kaufhof is preparing for a possible insolvency of its parent company Signa Holding, owned by Tyrolean investor René Benko, and its German subsidiaries.
Although Galeria had fulfilled its financial obligations to the German Signa subsidiaries up to and including November, it intends to make rental payments in December dependent on the situation and suspend them if necessary, the "Süddeutsche Zeitung" reported, citing company circles.
It is now being monitored very carefully to see how the situation develops, the statement continued. Accordingly, Galeria's rental payments will not be made directly to Signa in Austria, but to various companies in Germany. This means that the department store chain is bound by deadlines under German insolvency law.
Employees informed
According to media reports, one of the German subsidiaries, Signa Real Estate Management Germany, had already filed for insolvency at the local court in Charlottenburg on Friday. On Saturday, "Wirtschaftswoche" quoted from an employee letter in which the company itself informed about the insolvency.
The company's "current economic situation" and the "fact that, despite our best efforts, we have not succeeded in improving our financial situation and the necessary liquidity in the short term, have unfortunately left us with no other option but to take this path", the statement reads. A provisional insolvency administrator will "probably be appointed by the local court at very short notice".
The employees' salaries are now secured for up to three months via the insolvency substitute benefits. The next steps will now be coordinated with the provisional insolvency administrator and communicated as quickly as possible.
Several divisions of the group of companies founded by Austrian real estate investor René Benko, particularly in the real estate sector, had recently run into difficulties. At the beginning of November, Benko relinquished the management position in his Signa Holding and handed over the chairmanship of the group's advisory board to restructuring expert Arndt Geiwitz.
Effects as far away as Switzerland
René Benko's case also made headlines in Switzerland. Bank Julius Baer allegedly granted large loans to the Signa holding company. Julius Baer shares have been under pressure on the stock market in recent days.
Benko is also co-owner of the traditional Globus department store in Switzerland. Signa and the Central Group each own half of the Globus Group and its real estate. The Central Group of the Thai Chirathivat family had therefore made a verbal commitment to Globus in order to support the department store.
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