“Only to the detriment” – Signa Holding already went bankrupt when it bought Selfridges

Abel reports on follow-up agreements between the Signa companies that went exclusively to the detriment of Prime. Specifically, Signa Prime has acquired the company that owns the Selfridges Trophy properties in London and Manchester, with half its share in the British Selfridges Group and therefore the retail division being acquired by Signa Holding.

Signa Prime gave the ailing Holding Monster a loan
To finance it, Signa Prime provided the holding company with a loan of around 463 million euros – money that should have been repaid by the holding company at the end of 2022, but which, according to Abel, was not raised by the company, which was ‘materially insolvent’ at the time.

Abel: Shifting money to ‘clean up’ the balance sheet
To finance the purchase of the real estate company, the owners of Prime decided to increase their capital, according to the curator. In this regard, it should have been clear to the board “already at this point” that “a significant part” of the newly injected capital would flow back to the holding company due to the loan agreement. To get the loans “off Signa Holding’s books,” Prime reacquired two of the holding company’s financing companies in December 2022 in “an intricate and complex multi-stage transaction,” the purchase price of which was offset “against the outstanding loans” . loan receivables.”

Abel complains that a “cleanup” of the company’s annual balance sheet was the “sole purpose” of these transactions. There was “no operational or business benefit” for the prime minister. In addition, the purchases of the two companies – which, according to Abel, mainly finance vehicles within the group – would have caused Prime ‘exclusive damage’. “No external third party would have paid a serious amount of money for such companies (…).” It is therefore clear that the board of directors is not concerned about the value of the acquired shares or the consequences of the transaction for the liquidity of the company. Prime’ or ‘other, relevant information’, according to the Abels judgment.

Criticism of former commissioners
Abel is also tough on Prime’s former supervisory board members, including former chairman of the supervisory board and former SPÖ chancellor Alfred Gusenbauer, over the cash transfers. For example, the approval to conclude contracts with the holding company was not preceded by “any discussion in the supervisory board” “it was simply ‘waved on’”. The regulatory body also did not discuss why the holding company would transfer the ‘business opportunity’ (through the purchase of the Selfridges properties, note) to Prime.

Until almost a year ago, Gusenbauer was chairman of the supervisory boards of the most important Benko companies: he was chairman of the supervisory boards of Signa Prime Selection and Signa Development Selection AG for many years, until their collapse. Both core businesses of the Signa Group, which was deliberately built opaque, have been insolvent as of late 2023, with debts running into double digits of a billion, we reported.

Abel ultimately directed management’s criticism, according to which the takeover of the financing companies was an “impermissible loan agreement”, to the supervisory board, which subsequently approved the transactions. Because he also did not properly deal with the consequences for Prime: “Not a single question about this has been documented,” according to the lawyer’s letter.

Signa shares have now been sold
Signa’s shares in the Selfridges Group have now been sold. As of October 2024, the Saudi Arabian Public Investment Fund (PIF) owns 40 percent and the vast majority (60 percent) of Thai Central Group. The ownership structure applies to both the operating companies and the real estate companies of the department store group.