The RAG Foundation in Essen has completely written off its investments in the insolvent Signa Group. This is likely to cost the foundation a three-digit million sum. Nevertheless, the annual balance for 2023 is positive.
The Essen-based RAG Foundation has written off all of its investments in the insolvent Signa Group of the Tyrolean real estate investor René Benko. RAG CEO Bernd Tönjes announced this to the “Frankfurter Allgemeine Zeitung” (FAZ). According to him, this amounts to “between one and two percent” of the foundation’s total assets and is therefore a “still manageable proportion”.
The RAG Foundation currently has assets of 17.6 billion euros. The amount written off is between around 180 million and 350 million euros.
Positive outlook despite depreciation
CEO Tönjes explained: “As of today, we no longer have any risk in Signa. On the contrary, there is at most a potential opportunity.” This opportunity would exist, for example, if emergency sales could be avoided, there would be a reversal of value and the creditors and shareholders would have their say in the insolvency proceedings.
According to the media report, the RAG Foundation has a stake of around five percent in luxury properties owned by the insolvent Signa Prime AG and a 3.5 percent stake in Signa Development AG. “We are confident because at Signa we are only invested in real estate – and in premium locations such as the Golden Quarter in Vienna. These values all still exist,” says Tönjes.
Signa investments a “very good business” until 2022
In 2017, the foundation board at the time decided to join Signa Prime. “If you wanted to invest in high-quality European real estate at this point in time, there was no way around Signa,” said Tönjes. Bankruptcy was not foreseeable at the time.
The investment initially developed very positively. Around 60 million euros in dividends were returned, and a further 20 million euros were later received through a partial sale. “Being invested in the Prime real estate companies and later also in Development was initially very good business,” states Tönjes. However, this development has clouded over from 2022 onwards.
RAG-Stiftung: Overall positive annual balance
According to Tönjes, the RAG Foundation made significant overall profits last year through other investments. In addition, the expenses for the so-called perpetual tasks in mining were around 150 million euros less than expected. The foundation has therefore exceeded its planned result of 286 million euros.
According to preliminary figures, a result of around 400 million euros is expected to have been achieved. There is “no reason to worry about the foundation’s ability to fulfill its tasks,” emphasized the chairman of the board.
The RAG Foundation finances the obligations that have existed as so-called perpetual tasks since the end of the German hard coal mining industry. These include, among other things, mine drainage and groundwater purification in the former hard coal mining areas in the Ruhr, Saar and Ibbenbüren.