Billionaire Benko’s real estate and trading empire is teetering. After Signa Holding, two core companies in his real estate empire are now insolvent. This applies, for example, to the Elbtower in Hamburg or the KaDeWe in Berlin.
The most important units of the Signa trading and real estate group led by the Austrian investor René Benko are seeking insolvency proceedings. As the real estate and trading group Signa announced, Signa Prime Selection AG and Signa Development Selection AG will apply to the Vienna Commercial Court to open restructuring proceedings under self-administration.
Continuation of the operational business operations
The aim is “the orderly continuation of operational business operations within the framework of self-management and the sustainable restructuring of the company,” said a press release. Despite considerable efforts in recent weeks, the necessary liquidity for an out-of-court restructuring could not be sufficiently secured.
Now it is important to find long-term solutions, said Erhard Grossnigg, spokesman for the board of Signa Prime Selection AG. The quality of the prime portfolio is excellent, and the development prospects of the development projects, which are located in the top locations of German-speaking cities, are very good.
Celebrities Commercial real estate affected
Signa Prime includes commercial properties in top locations – including the Elbtower in Hamburg, the KaDeWe in Berlin and department store properties from the Galeria Karstadt Kaufhof chain. Signa Prime builds and rents real estate. Other companies are responsible for the retail business of the department stores.
According to the company website, Signa Prime owns properties worth a total of 20.4 billion euros. According to the annual report for 2022, Signa Prime had liabilities of almost 10.8 billion euros at the end of the previous year. Signa Prime posted a loss of around one billion euros last year after the value of the investment properties was devalued by around the same amount, especially in Germany. The company’s four board members were nevertheless awarded bonuses totaling 19 million euros.
Filing for bankruptcy has already been announced
Signa Development had already announced the prospect of filing for insolvency last week, citing its liquidity situation. Signa Development ended the previous year with a loss of around 316 million euros and board bonuses totaling nine million euros.
Signa Development specializes in the development of urban development projects in the residential and commercial segments. The current balance sheet total is stated on the website as 4.6 billion euros. After strong growth in the low interest rate phase, the company network created by Benko, like the entire real estate industry, is struggling with higher construction costs, energy prices and interest rates. In addition, stationary retail is under economic pressure.
Other Signa companies already do insolvent
The online sporting goods division had already filed for bankruptcy in October. In the past few weeks, Signa Holding and a number of smaller sub-companies announced their insolvency. Signa Retail Selection AG, based in Switzerland, has announced that it will wind up the company in an orderly manner. The Galeria Karstadt Kaufhof department store group is also assigned to Signa Retail and is therefore likely to be up for sale.
Oliver Soos, ARD Vienna, tagesschau, December 28th, 2023 12:33 p.m