Real estate - 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 today.
The company, which specializes in project developments, is therefore seeking restructuring proceedings under self-administration, as Signa 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.
Signa Prime Selection AG also filed for insolvency
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.
Higher interest rates, higher construction costs and higher energy prices
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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- The filing for insolvency by Signa Development Selection AG adds to the financial woes of René Benko's Signa Group, which already includes another real estate company in insolvency.
- Rene Benko's Signa Group, currently facing insolvency, has a significant presence in the construction sector, with projects specializing in development selection.
- The insolvency petition filed by Signa Prime Selection AG, a real estate company under Signa Group, further exacerbates the group's financial situation.
- Gerhard Weinhofer, a Creditreform spokesperson, noted that the insolvency petitions filed by Signa companies have accumulated substantial claims, amounting to around twelve billion euros in total.
- The construction sector has been impacted by various factors, such as higher interest rates, construction costs, and energy prices, making it difficult for companies like Benko's Signa Group to operate under financial strain.
- Besides its real estate flagship, Signa Group's Austrian operations involve several other entities engaged in retail trade and development selection, which could potentially be affected by the ongoing insolvency proceedings.
- Signa Development Selection AG's restructuring proceedings under self-administration, as announced, may provide a chance to pay back some of the debt to its creditors by offering a 30% quota payable within two years.
Source: www.stern.de
