Large crowd at Signa creditors’ meeting in Vienna
Published: Monday, Mar 18th 2024, 15:20
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Today is a decisive day for the future of the Signa Group founded by René Benko - the creditors of the real estate company Signa Prime are currently voting on the submitted restructuring plan at the Vienna Commercial Court.
The plan requires both a majority of creditors and a majority based on the amount of the claims. Before the restructuring plan meeting began, a long queue of creditor representatives formed outside the meeting room.
According to credit protectors, it is not possible to predict the outcome of the vote. A media report caused a stir before the start of the hearing. According to an insider, Hamburg billionaire Klaus-Michael Kühne, who lives in Switzerland, could help the insolvent Signa Prime with an emergency loan. A person familiar with the situation told Reuters news agency on Monday that talks were underway regarding a loan of more than 100 million euros.
The Bloomberg agency had previously reported on such an emergency loan. Kühne and several banks could provide a total loan of more than 100 million euros, the Bloomberg report said, citing several people familiar with the matter. The money would provide liquidity to cover bills and continue construction work, the insiders said.
Important persons against plan
Wolfgang Peschorn, who represents the interests of the Republic of Austria at the creditors' meeting as President of the Procurator Fiscal's Office, has already made it clear: He will not agree to the restructuring plans. The restructuring plans presented are aimed at achieving higher proceeds by selling the properties under a trustee model than in the event of bankruptcy.
The liquidity required for a slow sale "is currently not in sight", said Peschorn today (Monday) on Austria's Ö1 "Morgenjournal". Even if the restructuring plan is accepted, the company would have to be sold under pressure. "Only by selling can the company keep its head above water in the coming weeks."
If the restructuring plans are rejected, bankruptcy proceedings are envisaged instead of restructuring proceedings under self-administration. In both scenarios, there will not be much left of the companies in the long term and all properties and projects will be sold.
Peschorn once again criticized the lack of transparency of the Signa Group. Bankruptcy would "definitely" bring more clarity. For example, money could have been taken out of the companies and then reinvested in new projects, he suspects. An investor could now appear, "who is now acting as a creditor with the money that was once in the companies".
Peschorn believes criminal investigations are possible. "And I also hope that the criminal authorities will start targeted investigations here as soon as possible." In this case too, bankruptcy proceedings "would undoubtedly be an advantage for the criminal prosecution authorities, because a trustee in bankruptcy can work very well with them".
Largest insolvency in Austria's history
The Signa bankruptcy series is by far the largest insolvency in Austrian economic history. Creditors have filed record claims of around 10.8 billion euros against the insolvent luxury real estate company Signa Prime, of which only just under 3.1 billion euros have been recognized by the administrator according to the latest restructuring report.
Claims of EUR 2.3 billion have been registered against Signa Development, of which EUR 1.3 billion have been recognized to date. Signa Prime's portfolio includes, for example, the luxury department store KaDeWe in Berlin, Selfridges in London and the Elbtower in Hamburg, which is currently 100 meters short of 245 meters, as well as many other properties, such as the Goldenes Quartier and the Park Hyatt Hotel in Vienna and the Tyrol department store in Innsbruck. Signa Development develops real estate projects outside the prime locations in Austria and Germany as well as in South Tyrol.
According to the restructuring plan proposals of Signa Prime and Signa Development, creditors are to receive at least 30 percent of their recognized claims within two years and all realizable assets are to be transferred to a trustee for liquidation or to satisfy creditors. In the view of the insolvency administrators, the trustee restructuring plans offered lead to a significantly higher quota expectation than in the break-up scenario and they therefore recommend that creditors accept the trustee restructuring plans.
The advantage of trustee restructuring is that the restructuring administrators gain time to achieve higher prices when selling the projects and companies, explained the creditors' representative Karl-Heinz Götze from Kreditschutzverband von 1870 (KSV1870) on Ö1 radio. In the event of bankruptcy, they would start selling immediately.
In Peschorn's opinion, however, it is "not at all certain that this 30% quota will be achieved if the restructuring plan is accepted". The quota is merely promised and could only be achieved under very optimistic assumptions.
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