Mon, Mar 18th 2024
Austrian investor René Benko’s prestigious real estate portfolios are on the brink as creditors deliberate the future amid insolvency chaos.
René Benko had once invested in prestigious projects Now his portfolio is being sold through the course of insolvency proceedings. The creditors will decide on the procedure.
The two most important companies of Austrian investor René Benko’s insolvent Signa Group are facing liquidation. On Monday afternoon, the creditors of the luxury real estate company Signa Prime Selection AG and the real estate developer Signa Development Selection AG will decide whether the portfolio of properties and construction projects should be sold in an orderly manner and with a higher yield – or quickly and possibly more cheaply.
The insolvency administrators of the luxury real estate company Signa Prime Selection AG and the real estate developer Signa Development Selection AG have proposed trustee solutions.
According to both administrators, the aim of the trusteeship is the orderly “complete realization and distribution” of all assets in order to settle around 30 percent of the billion-euro claims.
If the creditors of Signa Prime and Development do not approve the plans, the real estate portfolios would be sold more quickly and probably for significantly lower sums in so-called bankruptcy proceedings.
Signa Prime also includes the unfinished Elbtower in the northern German metropolis of Hamburg, the luxury department store KaDeWe in Berlin and buildings belonging to the Galeria Karstadt Kaufhof department store chain.
Subsidiaries holding the shares in German properties would be excluded from the Treuhand administration. However, according to the insolvency administrator’s plan, they will also be wound up once their properties have been liquidated.
In addition, the Austrian trustee would manage Signa Prime’s claims against its subsidiaries. Creditors of Signa Prime have registered claims of around 10.8 billion euros (approx. 10.4 billion Swiss francs). The insolvency administrator has so far only recognised around 3.1 billion euros of these claims.
Signa Development is facing claims of 2.3 billion euros, of which 1.3 billion have been recognized so far. Benko’s convoluted real estate and retail group was plunged into a crisis after years of expansion in the wake of rising interest rates, construction costs and energy prices. In Switzerland, the Globus chain of luxury department stores was part of Benko’s corporate empire.
©Keystone/SDA
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