Real estate empire - Further insolvency application at Signa
Another real estate company belonging to Austrian investor René Benko's ailing Signa Group has filed for insolvency. According to the Vienna Commercial Court, Signa Development Selection AG filed a corresponding application on Friday. The company, which specializes in project developments, is therefore seeking restructuring proceedings under self-administration, as Signa had already announced on Thursday. The company is to continue as a going concern and creditors are to be offered a quota of 30 percent payable within two years, it said.
According to the Creditreform protection association, the claims of around 200 creditors amount to around 1.3 billion euros. This means that the claims against the insolvent companies of the Signa Group currently total around twelve billion euros, said Creditreform spokesman Gerhard Weinhofer.
On Thursday, the group's real estate flagship, Signa Prime Selection AG, also filed for insolvency. The proceedings in self-administration have since been opened by the commercial court. Signa Prime owns commercial real estate in prime locations, including the Elbtower in Hamburg, the KaDeWe in Berlin and a luxury department store under construction in Vienna.
The highly complex Signa Group also has hundreds of smaller companies. "There is currently an insolvency cascade from top to bottom. The question is whether the cascade can be stopped in order to start liquidating the assets in peace," said Weinhofer. According to Creditreform, Signa Development's real estate portfolio includes 39 projects.
After strong growth during the low-interest phase, Benko 's empire had fallen into extreme difficulties due to higher interest rates, higher construction costs and higher energy prices. Signa also owns the department store chain Galeria Karstadt Kaufhof (GKK). It is not yet clear what the announced insolvency filing means for GKK itself.
According to Creditreform, Signa is the largest insolvency in Austria's post-war history. Signa Holding GmbH, whose insolvency proceedings have been running for around a month, is in first place with a debt of five billion euros, according to the APA news agency. It is followed by Signa Prime Selection AG with creditor claims of around 4.5 billion euros.
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- René Benko's real estate company, Signa Development Selection AG, specializes in construction and development projects.2.Gerhard Weinhofer, a spokesman for Creditreform, mentioned that the Signa Group's total claims against insolvent companies reach around twelve billion euros.3.Signa Prime Selection AG, another real estate company under Benko's control, filed for insolvency in Berlin, owning commercial real estate in prime locations such as the Elbtower in Hamburg, KaDeWe in Berlin, and a luxury department store under construction in Vienna.
- Gerhard Weinhofer also mentioned that Signa Development's real estate portfolio includes 39 projects, contributing to the insolvency cascade within the Signa Group.
- Rene Benko's extensive real estate empire faced extreme difficulties due to higher interest rates, construction costs, and energy prices, leading to the group's current insolvency situation.
- The Vienna Commercial Court opened the proceedings in self-administration for both Signa Development Selection AG and Signa Prime Selection AG, with creditors offered a 30 percent quota payable within two years.
- Benko's signa group boasts hundreds of smaller companies, some of which might face insolvency as well due to the group's challenges.
- German retail trading is closely watching Signa's real estate empire, grappling with the possibility of excess store inventory causing problems for retail companies like department store chain Galeria Karstadt Kaufhof (GKK), which Signa owns.
Source: www.stern.de
