René Benko cedes power in real estate group
Austrian real estate entrepreneur René Benko is stepping down from the management of the ailing Signa Group. As the company announced on Wednesday, the billionaire is stepping down as Chairman of the Advisory Board of Signa Holding. The German restructuring expert Arndt Geiwitz will take over the restructuring of the real estate and retail holding company. Benko will transfer his voting rights to Geiwitz.
"In the current situation, this is the best solution for the company, its partners, investors and employees," said Benko according to the press release. The task now is to restore trust. Signa's real estate portfolio remains unique. All parties involved are now called upon to support Signa.
Geiwitz said that the company now needed calm and order. Long-term solutions must be found. "It is therefore both responsible and necessary to initiate a comprehensive consolidation for the company now," said the well-known restructurer. The quality of the real estate portfolio and the planned projects, particularly in Germany, is very good.
Signa is building the 245-meter-high Elbtower in Hamburg, for example. The group also includes the department store group Galeria Karstadt Kaufhof, which has already been through two insolvency proceedings. The most recent proceedings were conducted under Geiwitz's leadership.
Higher interest rates, higher costs
Since the start 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. Due to the rise in interest rates, Signa Prime Selection suffered a write-down of EUR 1.17 billion in the previous year. This mainly affected properties in Germany, as can be seen from the consolidated financial statements of the luxury real estate holding company.
Signa has engaged additional external consultants to provide support in order to carry out a thorough review of all business areas and develop measures and a holistic concept for the group, it said.
According to the Austrian shareholder Hans Peter Haselsteiner, Benko's co-owners of the holding company had asked the billionaire to relinquish power over the company network after problems had accumulated in various divisions and projects. The Signa sporting goods division, for example, filed for insolvency in October. The construction of the Elbtower was interrupted. The 46-year-old Benko had built up his group of companies with the help of low interest rates and financially strong investors.
In the face of rising construction and energy costs, as well as higher interest rates, the retail trade sector within Signa has been impacted significantly. Despite these challenges, Signa's real estate portfolio, including the 245-meter-high Elbtower project in Hamburg, continues to hold promise.
With the escalating issues in various divisions and projects, such as the insolvency of Signa sporting goods and the pause in Elbtower construction, there's been a shift in focus towards retail trade and construction sectors in Signa's restructuring plan.
Source: www.dpa.com
