René Benko’s empire still looks wonderful in glossy photos. The Elbtower and the Alster Arcades in Hamburg, the Old Academy in Munich, the Golden Quarter in Vienna and many other shining facades: The Signa Prime Selection AG, one of the core companies of Benko’s group, boasts “exceptional properties in prime inner-city locations.” According to its own website, Signa Prime is said to be worth more than 20 billion euros. But what good is the most beautiful luxury if you’re obviously running out of money?
According to information from the Austrian news magazine profile and the South German newspaper was at Signa Prime and its sister company Signa Development Selection AG intensive calculations were made as to whether insolvency could still be avoided. This Thursday the time had come: an application was made to the Vienna Commercial Court to open restructuring proceedings under self-administration, Signa announced.
First Signa Holding had to go to court, and now two of the most important Signa companies also had to go to court. The holding’s restructuring manager, Viennese lawyer Christof Stapf, recently expressly stated that further bankruptcies are to be expected following the bankruptcy of Signa Holding. In a first report about the Signa Holding recently submitted to the Vienna Commercial Court, Stapf wrote: In addition to the restructuring process at the holding company, “further restructuring processes are expected in the short term.”
The empire that Benko created with a lot of foreign money and, in particular, with many good connections in politics and industry is increasingly threatened with collapse. However, this does not mean that the many magnificent houses shown on the Signa Prime and Signa Development websites have to close. Signa circles say that Austrian real estate is doing quite well. However, the completion of three major projects in Germany, namely the Hamburg Elbtower, as well as the Old Academy and the Karstadt House on Bahnhofsplatz in Munich, are particularly at risk.
Is in big problems: the Austrian René Benko.
(Photo: Georg Hochmuth/dpa)
There is currently little promise left in the Signa Group, which is said to have been worth more than 50 billion euros in the best of times. It looks as if a lot of things were more appearance than reality. As the restructuring manager of Signa Holding, Stapf first of all canceled or closed expensive flights and hunting trips as well as luxurious company representative offices. The private jet is for sale or has already been sold. Signa Holding invested seven million euros in two palaces that served as company headquarters and invested the same amount in inventory. This is what it says in his first report that Stapf submitted to the court. Such luxury may have blinded many financiers.
The Stapf report is insightful in many ways. The Signa Holding is therefore the majority owner of Signa Prime and Signa Development “indirectly through various investment vehicles”. In each case, a “large portion of the shares are likely to be pledged in favor of loan-financing creditors.” According to his report, Stapf is trying to stabilize both subsidiaries. This all seems like emergency open heart surgery.
In order to counteract the collapse of the group, Stapf wants to create a “central steering committee” for all important Signa companies that are already bankrupt or could soon go bankrupt. The various insolvency proceedings could then be coordinated, which would be in the interests of the most important creditors. In this context, Stapf also mentions possible “special tests”.
This is obviously aimed at clarifying seemingly opaque financial flows and much more. The entire financing structure of the Signa Group is “particularly complex,” writes Stapf. The holding company has also “recently only partially fulfilled its control function”. The most important thing now is “regaining control over individual parts” of the Signa Group, which Stapf gives a warning note in his report: To the extent that this is “actually still possible.”
Meanwhile, someone is trying to save what can still be saved
In the case of further bankruptcies, completely different things matter. The restructuring administrators, like lawyer Stapf at Signa Holding, would have to submit a restructuring plan within 90 days, which the creditors could then accept – or not. In order for it to even come to that, the creditors would have to be given the prospect of that they receive at least 30 percent of their money within two years.
Only then could the respective companies be saved. Self-administration restructuring is also intended for this purpose; This is already how it works at the holding company. Self-administration by the previous management for the restructuring manager of the holding company has its limits. Attorney Stapf writes in his report that he “took over all of the financial management.” Trust is good, control is better. It also fits that the Stapf report says that management activities are “monitored and accompanied” and that they coordinate on a daily basis.
Renovation under self-management – this could also happen with Signa Prime and Signa Development. This is what you can hear from the Signa Group. Meanwhile, as the holding company’s restructuring manager, Stapf is trying to save what can still be saved. The most recent entry at the Vienna Commercial Court in this case is: “The company will continue as a going concern.”