Signa Holding, owned by Tyrolean real estate investor René Benko, is filing for insolvency at the Vienna Commercial Court today, Wednesday. The company announced this in a communiqué. A restructuring procedure with self-administration is being applied for.
“Despite considerable efforts in recent weeks, the necessary liquidity for an out-of-court restructuring could not be sufficiently secured,” the statement says.
The aim is an “orderly continuation of operational business operations” and a restructuring of the company. The group was in trouble due to high interest rates and construction costs.
The real estate and trading group Signa grew strongly in times of historically low interest rates. But since the start of the war in Ukraine, the real estate industry has been struggling with increased construction and energy costs as well as higher interest rates – the Signa Group has not been spared either.
Benko’s yacht is for sale
According to an analysis by the bank “JP Morgan”, the Signa Group has debts of at least 15 billion euros. And negotiations with possible financiers and lenders were apparently unsuccessful. It didn’t help that Benko mortgaged his villa in Tyrol for 15 million euros and tried to sell his private yacht for 40 million.
Nothing has been achieved with the insolvency proceedings
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Assessment by business editor Matthias Pfander: “The fact that Signa Holding was unable to raise fresh money in a timely manner cannot really surprise anyone after all the headlines of the last few weeks.
The whole conglomerate is opaque and so is what value the structure still has. Seen from this point of view, the attempt to seek restructuring by filing for insolvency is the logical consequence of this. If the insolvency application is approved by the court, an insolvency administrator appointed by the court must ensure that all creditors who fear for their money receive justice.
The fear continues for the Swiss branches of this mega-bankruptcy: for the private bank Julius Baer, which fears for its 606 million francs in outstanding loans, as well as for Globus, the department store in which Wunderwuzzi René Benko has invested. At least there was something like a rallying cry from the other Globus investor, the Thai Central Group.
It will ensure that Globus and the other European luxury department stores in which the group has a stake receive “the necessary support to be able to continue their operations as usual”.
The creditors have not gained anything from the insolvency proceedings alone. The clean-up work is likely to be time-consuming and it will remain uncomfortable for everyone involved with Signa and Benko – until they finally find out how much this adventure has cost them.
The group includes numerous commercial properties in Germany and Austria as well as the department store group Galeria Karstadt Kaufhof, which has already gone through two insolvency proceedings.
According to the Financial Times newspaper, dozens of banks and other lenders in Europe are now examining what a collapse of the Signa Group would mean for them. The group is complex and intricate; Hundreds of interconnected companies belong to the conglomerate, so it is currently not clear what consequences the bankruptcy will have.
Half of the Swiss Globus Group was also taken over by Signa in 2020. The Thai conglomerate Central Group took over the other half. The deal included both the department store activities and eight Globus properties in prime locations.
Thai Central Group reaffirms commitment to Globus
The Central Group has now reaffirmed its commitment to Globus. “Regardless of the position of our joint venture partner, Central Group intends to support all of its European luxury businesses, including Globus,” the group told AWP news agency.
Central Group “will ensure they receive the necessary support to continue operating as usual.”
The Thai group also emphasized that it is a “long-term owner and investor for all its businesses”. A week ago, the company, which is backed by the very wealthy Chirathivat family, had already strengthened its backing for the Swiss department store in a verbal commitment.