The bondholders are worried because the cash resources of subsidiary Signa Development have fallen drastically within a few months. As a result, many major construction sites are at a standstill, including several projects in Berlin. That’s why you urgently need fresh money.
Signa Development, which is responsible for the development of urban real estate within the group, is experiencing enormous financial problems. In the half-year balance sheet for 2023, liquid assets fell from 125 to only 32 million euros. The operating loss amounted to 149 million euros. This explains why, for example, construction of all projects in Berlin was halted.
Since the development also issued bonds to finance it, the investors (bondholders) were informed of the critical situation on Thursday. It was explained that the mysterious loss of cash was related to money having apparently been moved within the Benko Group.
“Unpaid services”
This resulted in claims for “unpaid services” amounting to €100 million. This development resulted in a halt to cash transactions within the Signa group.
This and the reduction in claims against other Signa companies should dramatically improve liquidity. The 700 million euro Beam project (office complex in Berlin Mitte) has now been sold in its entirety to the holding company of Signa investor Klaus Michael Kühne.
That alone is not enough. Management admitted that Signa Development and sister company Signa Prime face significant challenges in enabling the continuation of real estate projects. Development has 2.2 billion euros in liabilities, while Prime (it has more real estate assets) has 10.8 billion euros, as reported.
New Signa boss Arndt G Proteinz appointed a new restructuring manager for both companies on Friday, together with management consultant Ralf Schmitz.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
