In the wake of the difficulties faced by the real estate and trading group Signa, another subsidiary has filed for bankruptcy.
As emerged on Monday from an online publication on insolvency announcements, Signa Real Estate Management Germany GmbH, which develops and manages Signa Group properties in Germany, is now affected. Accordingly, the Berlin lawyer Torsten Martini is appointed as insolvency administrator. Several media outlets had previously reported on the insolvency application at the Berlin-Charlottenburg district court. Signa Holding in Vienna, founded by Austrian billionaire René Benko, did not respond to repeated inquiries from the German Press Agency.
Signa Real Estate Management Germany, which according to the Federal Gazette had around 140 employees in 2021, is a service provider within Benko’s network of companies and not the owner of Signa properties and projects such as the Munich Alte Akademie, the Hamburg Alsterarkaden or the Berlin skyscraper Stream. However, with the problems of Signa Real Estate Management Germany, another crack in Benko’s complex company structure is becoming visible, which in Germany includes the Galeria Karstadt Kaufhof department store group, which has already been restructured twice, and the Elbtower, which has been affected by a construction freeze
Construction stop in Hamburg and bankruptcy of the sports retail division
At least there was a ray of hope on Monday at the currently dormant Elbtower skyscraper construction site in Hamburg’s Hafencity. Logistics billionaire Klaus-Michael Kühne is considering joining the project, a spokeswoman for Kühne Holding AG said in response to a dpa request. However, there are currently no discussions with the city of Hamburg.
At the end of October, Signa’s sports retail division filed for bankruptcy. At the beginning of November, under pressure from fellow shareholders, René Benko announced his resignation as chairman of the Signa Holding advisory board, but remained the majority owner through his family foundation. The German renovator Arndt Geiwitz was brought on board and equipped with extensive management skills. It remains to be seen whether he will be able to present essential steps to restructure the company by the end of November, as announced, and whether co-owners or other investors will make new money available for Signa in time.
In times of low interest rates, the Signa Group was able to expand significantly. But the real estate industry has been struggling with increased construction and energy costs as well as higher interest rates since the start of the Ukraine war. Because of the increased interest rates, Signa Prime Selection suffered a devaluation of 1.17 billion euros last year. According to the luxury real estate holding’s consolidated financial statements, properties in Germany were primarily affected.
Criticism and questions about billionaire Benko
With the Signa crisis, 46-year-old Benko has once again become the focus of media and politics. As a teenager, he began converting attics in his hometown of Innsbruck. With the help of financially strong investors, he managed to get into prestigious buildings such as the Chrysler Building in New York or the luxury Hotel Bauer in Venice, and became one of the richest Austrians. But within weeks his estimated wealth is said to have shrunk significantly. The US magazine Forbes estimated Benko at 5.6 billion euros at the beginning of November, but on Monday the value was only 2.6 billion euros.
Benko’s business model has repeatedly attracted criticism. Trade unionists and politicians such as Left Party leader Martin Schirdewan have accused Benko of only being interested in Galeria Karstadt Kaufhof because of the real estate. Similar questions arose last summer when Signa sold the Austrian furniture chain Kika/Leiner. Just a few days after the deal was announced, the new owner filed for bankruptcy and announced the layoffs of 1,900 employees. This sale and Benko’s proximity to Austrian politics will be the subject of two parliamentary investigative committees in Austria in the coming months. (dpa)