After Signa Holding, another division of billionaire René Benko’s real estate and trading empire is now in dire straits. Signa Prime is responsible for the KaDeWe in Berlin and the Elbtower in Hamburg.
The most important units of the Signa trading and real estate group led by the Austrian investor René Benko are seeking insolvency proceedings. The company announced that Signa Prime Selection AG applied for self-administration restructuring proceedings at the Vienna Commercial Court on Thursday. Signa Development Selection AG will follow this step on Friday, it was said. “The aim is the orderly continuation of operational business operations within the framework of self-management and the sustainable restructuring of the company.”
KaDeWe and Elbtower belong to René Benko’s empire
Signa Prime includes commercial properties in top locations, including the Elbtower in Hamburg, the KaDeWe in Berlin and department store properties from the Galeria Karstadt Kaufhof chain. Signa Prime builds and rents real estate. Other companies are responsible for the retail business of the department stores.
According to the company website, Signa Prime owns properties worth a total of 20.4 billion euros. According to the annual report for 2022, Signa Prime had liabilities of almost 10.8 billion euros at the end of the previous year. Signa Prime posted a loss of around one billion euros last year after the value of the investment properties was devalued by around the same amount, especially in Germany. The company’s four board members were nevertheless awarded bonuses totaling 19 million euros.
“Despite considerable efforts in recent weeks, the necessary liquidity for an out-of-court restructuring could not be sufficiently secured,” the press release continues. It is important to find long-term solutions, said Erhard Grossnigg, spokesman for the board of Signa Prime Selection AG. The quality of the prime portfolio is excellent, and the development prospects of the development projects, which are located in the top locations of German-speaking cities, are very good.
There were signs of bankruptcy filings
Signa Development had already announced the prospect of filing for insolvency last week, citing its liquidity situation. Signa Development ended the previous year with a loss of around 316 million euros and board bonuses totaling 9 million euros. Signa Development specializes in the development of urban development projects in the residential and commercial segments. The current balance sheet total is stated on the website as 4.6 billion euros.
After strong growth in the low interest rate phase, the company network created by Benko, like the entire real estate industry, is struggling with higher construction costs, energy prices and interest rates. In addition, stationary retail is under economic pressure.
Signa bankruptcy
Luxury hotels, SportScheck, Galeria – it’s all part of René Benko’s bankrupt empire
Other Signa companies are already insolvent
The online sporting goods division had already filed for bankruptcy in October. In the past few weeks, Signa Holding and a number of smaller sub-companies announced their insolvency. Signa Retail Selection AG, based in Switzerland, has announced that it will wind up the company in an orderly manner. The Galeria Karstadt Kaufhof department store group is also assigned to Signa Retail and is therefore likely to be up for sale.
Austrian entrepreneur René Benko’s Signa Holding also filed for bankruptcy at the end of November. High construction costs, rising loan interest rates and home-made problems had brought the trading and real estate group into difficulties and had already led to the insolvency of its subsidiary Signa Real Estate Management Germany (Signa REM).
Source: Stern
