Restructuring proceedings opened for Signa Prime
Published: Thursday, Dec 28th 2023, 17:41
Updated At: Friday, Dec 29th 2023, 00:58
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A few weeks after the insolvency of Austrian entrepreneur René Benko's Signa holding company, the group's most important real estate subsidiary is also insolvent. Signa Prime Selection AG has applied to the Vienna Commercial Court for restructuring proceedings with self-administration. Insolvency proceedings have already been opened as a result.
The reorganization proceedings for Signa Prime were opened on Thursday afternoon at the Commercial Court in Vienna, as reported by the creditor protection associations Creditreform, AKV and KSV1870. Creditors can register their claims until February 14, 2024. An insolvency administrator has also been appointed.
The first creditors' meeting and "report meeting" has reportedly been scheduled for January 15. The restructuring administrator will then have to report on whether the financial plan is being adhered to and whether there are grounds for the withdrawal of self-administration, writes KSV.
The "Prüfungstagsatzung" will follow on February 26. The decisive "restructuring plan meeting" for Signa Prime with the vote on the restructuring plan will then take place on March 18, 2024. The company is offering its creditors a restructuring quota of 30 percent payable within two years.
Kauhäuser and Elbtower
According to the company, the Signa subsidiary is "the largest company in Signa's real estate division". According to the Creditreform protection association, the claims of around 300 creditors of Signa Prime amount to around 4.5 billion euros. This would be offset by realizable assets of around 1.3 billion euros. Signa Prime and Signa Development together have 105 large properties or development projects in their portfolio.
Signa Prime Selection owns well-known properties in Germany, including the KaDeWe department store in Berlin, the Alsterhaus in Hamburg and the Oberpollinger department store in Munich. The properties also include the Galeria stores in Munich and Berlin and the still unfinished Elbtower in Hamburg. There are also properties in Austria, particularly in Vienna. Other companies are responsible for the retail stores in the buildings.
The aim of Signa Prime Selection's insolvency application is "the orderly continuation of business operations within the framework of self-administration and the sustainable restructuring of the company", Signa announced in Vienna. "The quality of the Signa Prime portfolio is outstanding," explained the company's CEO, Erhard Grossnigg.
The "Handelsblatt" reported, citing informed circles, that Grossnigg wants to retain the core of Signa Prime. The real estate portfolio is to be largely sold as part of the restructuring process. Signa Prime is also preparing a "comprehensive savings package". In Germany, 200 out of 300 jobs are to be cut, in Austria 100 out of 150.
Further restructuring procedures
Signa announced on Thursday that another subsidiary, Signa Development Selection AG, would also file for debtor-in-possession restructuring proceedings on Friday. According to the company, Signa Development Selection invests in "development projects in urban centers", such as office buildings and residential complexes, "future-proof" retail space or hotels. According to the company, its total assets amount to 4.6 billion euros. The list includes the Wolfsburg Connect project area and several office buildings in Berlin and Vienna.
Austrian entrepreneur René Benko's Signa Holding filed for insolvency at the end of November. High construction costs, rising interest rates on loans and home-made problems had brought the retail and real estate group into difficulties. "It is known that external factors have had a negative impact on business development in the real estate sector in recent months," Signa also emphasized on Thursday.
The Swiss subsidiary Signa Retail Selection is already in debt restructuring moratorium. It holds the German department store chain Galeria, for example, as well as the Signa Group's 50 percent stake in the Swiss department store group Globus. The remaining 50 percent of Globus is held by the Thai Central Group.
Rapid ascent
René Benko came from a humble background and managed to become one of the richest entrepreneurs in the country without a school-leaving certificate. The Austrian magazine "Trend" estimated his fortune at 4.2 billion euros this year. The Innsbruck native began building his now faltering empire at the age of 22.
Benko has attracted a number of well-known investors to join his company empire, including the Kühne Holding of logistics entrepreneur Klaus-Michael Kühne and Lindt&Sprüngli Chairman of the Board of Directors Ernst Tanner. His closeness to former Federal Chancellor Sebastian Kurz (ÖVP) was repeatedly discussed in the media.
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