Signa Holding insolvent: Unclear future for Benko's group
Another important company in the Signa network of companies owned by Austrian real estate and retail investor René Benko is solvent. The insolvency application of Signa Holding GmbH is the provisional low point of the group, which holds a stake in Kadewe in the capital city, among other things. On Wednesday, the holding company applied to the Vienna Commercial Court to open restructuring proceedings under self-administration - "not good news" for Berlin as a department store location, according to Franziska Giffey, Senator for Economic Affairs.
"We are continuing to use all channels of communication to better assess the impact. At the moment, however, the consequences of the restructuring process in Austria on the complex Signa companies in Germany are not yet foreseeable," the SPD politician told the Deutsche Presse-Agentur on request. "What is clear, however, is that we want to stick to our goal: the preservation and urgently needed further development of the department store locations in Berlin and thus also the safeguarding of jobs and the supply structure for Berliners," said Giffey. This requires reliable partners "who can also live up to their responsibility as investors".
As the Signa Group, founded by billionaire Benko, is not structured as a hierarchical group but as a complicated network of companies, the many sub-companies must decide for themselves whether they are still solvent or whether they will also file for insolvency, Deutsche Presse-Agentur has learned from well-informed sources.
The real estate and retail group Signa had grown strongly in times of historically low interest rates. However, since the beginning of the war in Ukraine, the real estate sector has been struggling with increased construction and energy costs as well as higher interest rates - and Signa has not been spared. In addition to the situation in the real estate sector, Signa pointed out in its press release that bricks-and-mortar retail has come under severe pressure in Europe in recent years. Investments had not brought the expected success. "Despite considerable efforts in recent weeks, the necessary liquidity for an out-of-court restructuring could not be secured to a sufficient extent," it said.
Millions still outstanding for Galeria Karstadt Kaufhof
The consequences of Signa Holding GmbH's insolvency for the department store group Galeria Karstadt Kaufhof are uncertain for the time being. "The situation has no immediate negative impact on Galeria at the moment. We will calmly await the outcome of this orderly process," said company sources. Germany's last major department store group had to seek rescue in protective shield proceedings for the second time at the end of 2022. Signa had pledged 200 million euros for the restructuring. According to reports, the first 50 million should flow in February.
The complex Signa Group is involved in a number of construction projects in Germany, which are currently at a standstill according to media reports. In Berlin, these include the Karstadt locations in Neukölln and Wedding, a high-rise project on Ku'damm and a commercial project called "Glance" in Berlin-Charlottenburg. Signa's investments also include the Chrysler Building in New York and the Selfridges department stores in the UK.
Millions in premiums in the real estate division
The most valuable properties do not belong to the holding company, but to Signa Prime Selection AG. According to official company figures, it posted a loss of around one billion euros in the previous year after the value of the investment properties was devalued by roughly the same amount. The four board members of Signa Prime Selection were nevertheless awarded bonuses totaling 19 million euros. A more than 200 million euro bond issued by this company will mature on Thursday. Whether this important unit of the Signa Group and the real estate developer Signa Prime Development AG will also become insolvent remained unclear at first.
For the time being, only the timetable for the holding company, for which there are no annual financial statements for 2022 in the commercial register, was clear. According to well-informed insiders, a restructuring administrator is expected to be appointed by the court. A decision on the restructuring plan will be made within 90 days. If the creditors agree, they will be entitled to at least 30% of their claims within two years.
In recent weeks, the sports retail division and the German real estate management unit of Signa had already filed for insolvency. Benko, whose assets are estimated at 2.5 billion euros by the US magazine Forbes, announced at the beginning of November that he would be stepping down as chairman of the Signa advisory board under pressure from his fellow shareholders. German restructuring expert Arndt Geiwitz took his place and will remain on board as an internal advisor, according to insider sources. On Wednesday, as in previous months, Benko remained silent on the situation of his shaky real estate and retail empire.
Despite Signa Holding's insolvency application and the ongoing restructuring in Austria, the impact on the Signa companies in Germany, such as the department stores in Berlin, remains unclear. Reliable partners who can fulfill their investor responsibilities are crucial for the preservation and development of these locations.
The retail trade sector, including consumer goods, has faced severe pressure in Europe in recent years, contributing to Signa's financial struggles.
Source: www.dpa.com
