Major effect on the vote – Signa Prime: Creditors vote for a confidence solution

In the restructuring process of Signa Prime Selection AG, 475 creditors have so far registered a total of approximately EUR 12.8 billion for the restructuring plan, of which EUR 6.2 billion is conditional. Currently approximately 5.9 billion euros are recognised.

Creditors want a restructuring of the trust
As the Crown heard on Monday, plans to restructure the trust were accepted by a majority. According to the restructuring plan proposals of Signa Prime and Signa Development, creditors must receive at least 30 percent of their recognized claims within two years and the entire usable assets must be transferred to a trustee, in this case lawyer Norbert Abel, for the realization or satisfaction of the creditors .

From the trustees’ perspective, the trust restructuring plans offered led to a significantly higher quota expectation than in the bankruptcy scenario and they therefore recommended that creditors accept the trust restructuring plans in advance.

Sharp criticism from Peschorn
Wolfgang Peschorn, who as chairman of the Finanzprokuratur represents the interests of the Republic of Austria at the creditors’ meeting, made it clear before the vote: he would not agree to the restructuring plans. The restructuring plans presented are about achieving higher returns by selling the properties under a trust model than in the event of bankruptcy. The liquidity needed for a slow sale “is not in sight at the moment,” Peschorn told the “Krone”. Even if the restructuring plan were accepted, they would have to sell under pressure. “Only through sales can the company keep its head above water in the coming weeks.”

However, according to Peschorn, it is “not at all certain that this 30 percent quota will exist if the restructuring plan is accepted.” The quota is only a promise and could only be achieved under very optimistic assumptions.

‘Bankruptcy would bring clarity’
Peschorn again criticized the lack of transparency of the Signa group of companies in the Ö1 “Morgenjournal”. A bankruptcy would “certainly” bring more clarity. He suspects that money could have been taken out of the companies and then reinvested in new projects. An investor could now appear “who now acts as a creditor with the money that was previously in the company”.

Peschorn believes criminal investigation is possible. ‘And I also hope that the criminal authorities here will start targeted investigations as soon as possible.’ Also in this case, bankruptcy proceedings would “undoubtedly be an advantage for the law enforcement authorities, because a bankruptcy trustee can work very well with them.”

100 million loan from Kühne?
Before the negotiations started, reports from various German media caused a stir that, according to an insider, Hamburg billionaire Klaus-Michael Kühne could help bankrupt Signa Prime with an emergency loan. Discussions are underway about a loan worth more than 100 million euros, a person familiar with the situation told Reuters on Monday. Bloomberg agency previously reported about such an emergency loan.

Kuehne and some banks could provide a total loan of more than 100 million euros, the Bloomberg report said, citing several people familiar with the matter. The money would provide liquidity to cover bills and continue construction, the insiders said.

Largest bankruptcy in domestic economic history
The Signa series of bankruptcies is by far the largest insolvency in Austrian economic history. Signa Prime’s portfolio includes, for example, the Berlin luxury department store KaDeWe, the Selfridges in London and the Elbtower in Hamburg, which currently stands at a building height of 100 or 245 meters, and many other properties such as the Goldenes Quartier and the Hotel Park Hyatt in Vienna and the Tirol department store in Innsbruck. Signa Development develops real estate projects outside the best locations in Austria and Germany, but also in South Tyrol.