Is this the beginning of the collapse of the Rene Benco commercial and real estate group, or is this measure part of an emergency restructuring? However, a subsidiary of Signa Prime filed for bankruptcy in Berlin on Friday.
The unfinished Elbtower Tower in Hamburg: Planned to be 64 floors, it was intended to be the largest skyscraper in the Hanseatic city. As with other Signa Group projects, construction work has now stopped.
The crisis surrounding Austrian real estate investor Rene Benko’s highly complex Signa Group appears to be getting worse shortly before the weekend. Late Friday afternoon, Spiegel Online reported that the first company in the group of more than 1,000 companies had slipped into bankruptcy.
Signa Real Estate Management Germany reportedly filed for bankruptcy at the Charlottenburg District Court in the German capital on Friday afternoon. The company is a German subsidiary of Signa Prime Selection, through which Benko and his fellow investors own some top-tier properties, such as the luxury KaDeWe department store in Berlin. The Supervisory Board of Signa Prime Selection is said to have met for an emergency meeting in the afternoon. No statement was issued from the company.
Bankruptcy filings for several subsidiaries in preparation?
Early Friday afternoon, several media outlets reported that Signa Group was preparing insolvency filings for several subsidiaries. Observers interpreted this to mean that umbrella companies such as Signa Prime are currently barely or no longer able to provide subsidiaries with sufficient liquidity.
The latest announcement fits with reports that Signa Group and the restructuring expert it has appointed, Arndt Geiwitz, are looking for new capital. We are talking about up to 600 million euros, which will be secured with free assets of the Signa Prime real estate company. The time crunch is also significant because the €200 million bond matures at the end of November.
In addition, the various companies in the group have to finance ongoing expenses, for example rent and wages. According to media reports, about 1.5 billion euros are needed by mid-2024. In total, the Signa Group is said to have debts of about 15 billion euros.
Highly nested array structure
The umbrella company Cigna Holdings is divided into two main companies, Cigna Real Estate and Cigna Retail. Real Estate includes, among others, the subsidiaries Prime Selection for existing properties and Development Selection for real estate development.
Signa Retail in turn includes, among others, the department store group, which operates the Galeria Karstadt Kaufhof department store chain, which has been struggling for years. Signa has pledged to provide 200 million euros in liquidity to Galeria, the first installment of which is scheduled to be paid in March.
The entire structure of the Signa conglomerate is very complex and difficult to understand from the outside. It’s not entirely clear which units have which liabilities and to what extent Signa’s different companies have borrowed money from each other.
Sports trading platform bankruptcy
The bankruptcy announced now will be the first of its kind by the commercial and real estate part of the group. However, a few weeks ago, sports trading platform Signa Sports United, in which the Benko family’s private foundation owns 48 percent through several intermediary companies, and several subsidiaries, filed for bankruptcy.
According to the German Company Register, Signa Real Estate Management Germany is a central service provider for real estate businesses in Germany. In 2021 it had 150 employees. However, she does not have any investments in real estate.
You can contact Frankfurt business editor Michael Rasch on the platforms X, LinkedIn And Xing consequences.
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