Further insolvency in billionaire Benko's Signa Group
In the course of the imbalance of the real estate and retail group Signa, another subsidiary has filed for insolvency. As revealed on Monday in an online publication on insolvency announcements, Signa Real Estate Management Germany GmbH, which develops and manages real estate for the Signa Group in Germany, is now affected. Accordingly, the Berlin lawyer Torsten Martini has been appointed insolvency administrator. Several media outlets had previously reported on the insolvency application filed with the Berlin-Charlottenburg district court. Signa Holding in Vienna, which was founded by Austrian billionaire René Benko, did not respond to repeated inquiries from Deutsche Presse-Agentur.
Signa Real Estate Management Germany, which according to the Federal Gazette had around 140 employees in 2021, is a service provider within Benko's network of companies and not the owner of Signa properties and projects such as the Alte Akademie in Munich, the Alsterarkaden in Hamburg or the Stream high-rise in Berlin. However, the problems at Signa Real Estate Management Germany reveal a further crack in Benko's complex corporate construct, which in Germany includes the Galeria Karstadt Kaufhof department store group, which has already been restructured twice, and the Elbtower in Hamburg, which has been affected by a construction freeze.
Construction freeze in Hamburg and insolvency of the sports retail division
At least there was a ray of hope on Monday for the Elbtower skyscraper construction site in Hamburg's Hafencity, which is currently at a standstill. Logistics billionaire Klaus-Michael Kühne is considering getting involved in the project, a spokeswoman for Kühne Holding AG told dpa in response to an inquiry. However, there are currently no talks with the city of Hamburg.
Signa's sports retail division filed for insolvency at the end of October. At the beginning of November, Benko announced his resignation as Chairman of the Advisory Board of Signa Holding under pressure from fellow shareholders, but remained the majority shareholder through his family foundation. The German restructurer Arndt Geiwitz was brought on board and equipped with extensive management expertise. It remains to be seen whether he will be able to present significant steps to restructure the company by the end of November as announced, and whether co-owners or other investors will provide new money for Signa in time.
In times of low interest rates, the Signa Group was able to expand strongly. However, since the beginning of the war in Ukraine, the real estate sector has had to contend with increased construction and energy costs as well as higher interest rates. The rise in interest rates led to a write-down of 1.17 billion euros at Signa Prime Selection in the previous year. According to the consolidated financial statements of the luxury real estate holding company, this mainly affected properties in Germany.
Criticism and questions about billionaire Benko
Signa's crisis has also brought 46-year-old Benko back into the focus of the media and politics. He began converting attics in his home town of Innsbruck as a teenager. With the help of financially strong investors, he succeeded in acquiring prestigious buildings such as the Chrysler Building in New York or the luxury Bauer Hotel in Venice and became one of the richest Austrians. But within weeks, his estimated fortune is said to have shrunk considerably. At the beginning of November, the US magazine Forbes had estimated Benko to be worth 5.6 billion euros, but on Monday the figure was only 2.6 billion euros.
Benko's business model has repeatedly provoked criticism. Trade unionists and politicians such as Left Party leader Martin Schirdewan have accused Benko of only being interested in Galeria Karstadt Kaufhof because of the real estate. Similar questions arose last summer when Signa sold the Austrian furniture chain Kika/Leiner. Just a few days after the deal was announced, the new owner filed for insolvency and announced the dismissal of 1900 employees. This sale and Benko's proximity to Austrian politics will be the subject of two parliamentary committees of inquiry in Austria in the coming months.
In addition to Signa Real Estate Management Germany's insolvency, another sector within Benko's business empire, the sports retail division, also faced financial difficulties and filed for insolvency at the end of October. These challenges in different industries, including real estate and retail trade, as well as the construction sector's freeze in projects like the Elbtower in Hamburg, indicate a broader issue within Benko's business construct.
Source: www.dpa.com
