Salvaging failed property-to-retail empire Signa turns into chaotic rush

Salvaging failed property-to-retail empire Signa turns into chaotic rush




Signa’s court-appointed insolvency administrator has bemoaned a complex corporate structure and lack of management control in his first report on efforts to salvage the international property and retail empire.

The group has already begun selling off some of its assets. Discussions will take place over the Signa Selection unit, which holds the stake in the Chrysler Building in Manhattan. 

The sale of Signa’s Cessna private jet is under way, and all activities related to the company’s engagement with clients, in particular hunting and flights, had been shut down immediately. 

And some investments will be sold with consent from debtors, including a minority stake in Kronen Zeitung, Austria’s largest newspaper.

There is no mention yet of its retail assets, including its minority shareholding in Selfridges Group, which in turn owns the Arnotts and Brown Thomas department stores here. 

The court-appointed insolvency administrator, Christof Stapf, has suggested creating a group-wide steering committee for the restructuring and said the short-term liquidity requirements needed to keep overhaul efforts alive would exceed the €3m already pledged, according to a statement published after a creditor meeting. 

The largest insolvency in Austria’s history is turning into a chaotic rush to provide corporate transparency and draw fresh funding despite the severe headwinds facing the global property industry. 

Over years of rapid expansion, 46-year-old Rene Benko lapped up some of Europe’s most prized luxury property assets, including Selfridges in London and Berlin’s KaDeWe, luring prominent billionaires and sovereign wealth funds as investors. Now, he’s struggling to contain the fallout from a meltdown that has creditors looking to recoup billions. 

Mr Benko has not held a formal management position in any of his companies since 2013, when he resigned as chief executive following a suspended court sentence for bribery. Still, as chairman of Signa’s advisory board, he has been instrumental in overseeing some of the group’s largest transactions.

The insolvency administrator has already set several liquidation plans in motion, and has hired Deloitte for forensic data analysis. A court-ordered data backup, he said, was “proving difficult but is now under way”. He is also reviewing several of Signa’s business deals. 

The statement illustrates the enormity of this task: A preliminary organisational chart of the Signa group comprised a total of 46 pages, the equivalent of about 5.7sq m. 

Austrian law does not allow for group-wide insolvencies. Signa Holding, a privately-held company which for years delayed the publication of its annual accounts, does not consolidate Signa Prime and Signa Development, the two main property-owning units whose assets were valued at more than €23bn. 

• Bloomberg


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