Signa's German Subsidiary Struggles, Filing for Insolvency
The Signa Group, an Austrian investor venture, is reportedly undergoing a transformation. As per recent reports, one of its subsidiaries, Signa Real Estate Management Germany, has filed for bankruptcy, and more filings may be imminent.
News outlet "Der Spiegel" broke the news about Signa Real Estate Management Germany filing for bankruptcy at the Charlottenburg district court. This subsidiary is a part of Signa Prime Selection, a division that manages prestigious properties, including luxury department stores KadeWe in Berlin, Alsterhaus in Hamburg, and Oberpollinger in Munich. Previous reports suggested Signa was preparing to file for insolvency for various parts of its company. Signa refused to comment on this matter.
Insiders hint at Signa's liquidity struggles. These issues arise in response to escalating interest rates and surging construction costs. The far-reaching Signa empire also encompasses the German department store giant Galeria.
The Signa Group has announced plans to present a restructuring plan by the end of November. Arndt Geiwitz, Chair of the Advisory Board supervising the restructuring, revealed the goal is to outline the main steps of the restructuring plan by the end of November, and subsequently present it to the shareholders. The plan involves scrutinizing all aspects of the Signa Group and finding long-term solutions.
René Benko, the Signa Group’s founder, recently relinquished his role within the company and appointed Geiwitz to spearhead the restructuring efforts. Geiwitz, known for his role as the insolvency administrator of the Schlecker drugstore group, also assumed the chairmanship of the Signa Holding advisory board and represents the interests of the Benko family private foundation during the restructuring phase. The extent of the restructuring period has not been determined yet.
Signa Real Estate Management Germany's bankruptcy filing is yet another challenge afflicting the Signa Group. Despite financial woes and liquidity problems, Benko stepped down and handed leadership to Geiwitz.
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Signa Group's struggles extend beyond the bankruptcy filing of Signa Prime Selection AG. The company is grappling with liquidity issues, a €10.3 billion extraordinary debt charge, and a receivership process. The restructuring plan involves raising additional €350 million through issuing new profit participation securities.
Signa Prime Selection AG's restructuring proceedings also involve asset sales. The Vienna Park Hyatt and surrounding luxury retail premises, including Prada’s flagship store, are up for sale, targeting €350 million to €370 million. Recent sales include the Upper West tower in Berlin and the Viennese palais housing Austria’s Constitutional Court.
Creditors have filed claims totaling €6.3 billion against Signa Prime. However, only €2.6 billion of these claims have been recognized by the restructuring administrator, which indicates many disputes.
Investigations focusing on potential deficiencies in money laundering prevention measures related to Signa's financial activities are underway by the Austrian Financial Market Authority (FMA). The Austrian Ministry of Justice is also planning reforms, including stiffer penalties for failing to submit balance sheets, in response to Signa's insolvency.
René Benko, Signa Holding's founder, has been arrested for suspected asset hiding, including assets held via trusts. Among these assets, €45.5 million are reportedly held in Liechtenstein.
Sources: , various enrichment sources.
