What many people suspected is now clear: René Benko’s Signa Holding has filed for bankruptcy and the restructuring process has already begun. Investors could lose billions as a result. There has never been a higher debt mountain in Austrian insolvency history.
The months-long search for financiers was unsuccessful and now brought the feared catastrophe to the Signa Group: the parent company Signa Holding had to file for bankruptcy at the Vienna Commercial Court. “Despite significant efforts in recent weeks, liquidity for an out-of-court restructuring could not be sufficiently secured,” Signa said. Due to external factors, retail investments did not bring the expected success and had a negative impact on real estate.
Management can continue to work
A restructuring procedure with self-administration has already been initiated. This means that Signa management may continue to operate, but a restructuring manager must agree to all decisions.
In any case, many billions of euros are at stake due to the bankruptcy. In addition to the shareholders of Signa Holding (Benko’s family foundation, well-known names such as construction magnate Hans Peter Haselsteiner, Fressnapf founder Torsten Toeller and Ernst Tanner of Lindt & Sprüngli), local banks are also threatened with high losses.
According to reports, the loans (mainly from Raiffeisen and Bank Austria) amount to €2.2 billion. At the Swiss private bank Julius Baer, this would involve an amount of another 630 million euros. If the planned restructuring is successful, but only the legally required minimum quota of 30 percent can be paid, the holding company’s creditors will lose 70 percent of their claims…
Total debts of five billion euros
The mountain of debt is enormous, creditor protection association AKV confirmed on Wednesday evening: 42 employees and 273 creditors are affected. The total debts therefore amount to five billion euros. According to the application, the debtor has assets with a book value of approximately 2.77 billion euros.
According to the AKV, this is the highest debt mountain in domestic insolvency history.
390 companies in Austria
It remains to be seen what will happen to the other Signa companies (about 390 in Austria alone). KSV1870 credit protector Karl-Heinz Götze: “From the current perspective, it is impossible to seriously estimate whether other companies in the group will file for bankruptcy and whether a domino effect will occur.”
According to reports, René Benko himself wants to contribute to the renovation. The Tyrolean recently sold his first shares in the holding company to Swiss investors. However, several real estate properties will probably also be redeemed – if no new donor comes along.
Six-figure debts also with Kurz
Speaking of supporters: Sebastian Kurz and René Benko, they too were once a close-knit community. The former turquoise chancellor also introduced the real estate juggler to the highest political circles – including Vladimir Putin. A joint trip to the Arab Emirates led to Benko being able to purchase the famous Chrysler Building from a consortium. During Kurz’s term in office, the turquoise blue government also helped Benko with the controversial and short-term takeover of the Leiner House on Mariahilferstrasse in Vienna.
100 million earned from an investor
There are also debts owed to a company owned by the ex-chancellor. A foreign donor is said to have been obtained through his company and provided around 100 million euros. In 2023, just after this successful search for investors, SK Management issued an invoice for Signa worth 2.4 million euros. Only 750,000 euros of this was paid. As a result, 1.65 million euros are still outstanding…
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.
