Image: APA/DPA/FRANK RUMPENHORST
This had an “extremely negative impact on the ability to refinance”. December salaries are still outstanding for the 13 employees.Vienna. “The applicant must therefore admit that material insolvency has occurred,” says the insolvency application sent to the Vienna Commercial Court on Friday morning. The status shows “that the positive equity capital in the books turns into an over-indebtedness of 870 million euros under the premise of (orderly) resolution. In the event of an uncoordinated fire sale, the break-up rate will be significantly lower.”
The restructuring plan requirement amounts to around 355 million euros with a 30 percent quota. “In addition, there are also subordinate claims of the holders of participation certificates.” The development’s main assets lie in domestic and foreign investments as well as corporate receivables.
“Transaction market for real estate has de facto come to a standstill”
Regarding the historical development of the “second significant company in the Signa Group from the real estate sector” according to the application, it says: “The share capital has been increased in seven steps to 6.49 billion euros since its founding. The most recent capital increase took place in May/June 2022 Issue of 688,161 shares at an issue price of EUR 200 million.”
- more on the subject: Next big bankruptcy in the Signa company network
“Since its founding, Signa Development has been able to establish itself as a sought-after investment property for institutional investors thanks to an attractive and profitable real estate portfolio. (…) To date, Signa Development has always been able to replace expiring financing with the same maturities by issuing new financial instruments “To even finance new projects,” says Signa’s application.
But in 2022 – after a years-long phase of zero interest rates by the ECB – the key interest rate was raised in ten steps to 4.5 percent. In addition, there was high inflation, increased energy prices and wage increases. “On the other hand, the transaction market for real estate has effectively come to a standstill.”
Gusenbauer Chairman of the Supervisory Board
The insolvency application also states: “The ECB also asked about the involvement of major European banks in Signa, which, even according to leading bankers, had an extremely negative impact on Signa’s ability to be refinanced.”
Regarding the self-administration process, Signa’s lawyers note in their restructuring application that “self-administration serves in particular to avoid change-of-control situations, which could have a highly detrimental effect on the entire Signa Development group in terms of corporate and tax law.” .
The requirements for the admissibility of the restructuring plan would be met. The board members also declared “that they are not absconders, that they have not been legally convicted of fraudulent Krida after becoming insolvent and that they are prepared to sign the list of assets presented to the court.”
The reason given for the place of jurisdiction in Vienna, despite the statutory seat in Innsbruck, is that management decisions were no longer made in the Tyrolean state capital; the location was only for historical reasons.
Erhard F. Grossnigg, Michael Möstl, Manuel Pirolt and Tobias Sauerbier sit on the development board. The head of the supervisory board is Alfred Gusenbauer and his deputy is Karl Sevelda.
more from economics
