Commitment to Globus from Thailand – Signa with lower rating
Published: Tuesday, Nov 7th 2023, 12:20
Updated At: Wednesday, Nov 8th 2023, 00:53
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The Thai co-owners of Globus made a verbal commitment to the luxury department store chain on Tuesday. The background to this is the financial turbulence at the Austrian partner Signa around the investor René Benko.
The Signa Group owns half of the Globus Group in Switzerland, while the other half is owned by the Central Group of the Chirathivat family from Thailand. In a statement obtained by the news agency AWP, the latter has now commented on the partner's rumored financial problems.
"Irrespective of the position of our joint venture partner, Central Group intends to support all of its European luxury stores, including Globus," it says. It will "ensure that they receive the necessary support to continue their operations as usual".
Possible scenarios for the future of Globus were played out in the media at the end of last week and over the weekend. One such scenario would be the takeover of Globus by the Central Group. The Thais are "reportedly" leaning towards a complete takeover of Globus, wrote the "Handelszeitung" on Friday. And the "NZZ am Sonntag" reported that a solution is being worked on at full speed in the background.
CCC rating only
At the same time, there is more bad news for Benko. The rating agency Fitch has downgraded Signa Development AG, one of Benko's four real estate investment companies, to "high risk".
Since the beginning of this week, the credit rating has only been "CCC" ("substantial risks"). This means that "no defaults are to be expected only in the event of favorable developments". Previously, Signa Development had been given a B rating ("highly speculative"). This means that "defaults are likely if the situation deteriorates".
As justification for the downgrade, the rating agency cited the figures from the company's interim report as of June 30, 2023, in which Signa Development announced that it was "facing challenges, also with regard to its liquidity position".
It is true that Signa Development, which Fitch now classifies as high-risk, does not have the same volume of projects as Signa Prime Selection, which has around 20 billion euros in assets. However, "unpaid suppliers and bank financiers" could "mutually contaminate and disrupt" the Signa companies, warns the rating agency.
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