2023-11-29 18:58:35
The Signa Holding of the Austrian real estate developer René Benko filed for bankruptcy under self-administration in Vienna on Wednesday. This was preceded by weeks of speculation about possible investors who would get Signa out of a financial jam. But obviously no White Knight has been found.
The crisis has been obvious for weeks: the construction sites in Germany on such prestigious projects as the 245-meter-high Elbtower in Hamburg and the luxury Carsch department store in Düsseldorf have come to a standstill. Benko’s environment strives to radiate calm. The self-administration process gives the group time to restructure, it is said.
A restructuring plan must be available within 90 days. Overall, there are two years to get back into stable waters. The two traditional bosses, Marcus Mühlberger and Christoph Stadlhuber, were supposed to manage the process together with a restructuring manager appointed by Viennese judges. However, the court must first give the green light.
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It is unclear what exactly the plan envisages – and why the renovation should now be more successful than in the past few months. After all, payment obligations no longer apply in insolvency proceedings. According to Austrian law, creditors must receive at least 30 percent of their claims in the process, it is said.
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It is also uncertain which subsidiary companies will subsequently file for bankruptcy. So far only the holding company itself is affected, as well as a German service company for the real estate division and several e-commerce companies.
The companies in which the properties are owned and which have different co-owners are not insolvent – although the construction companies have not been paid for weeks.
How much substance is in Signa?
A few machines, a company headquarters, patents – in many bankruptcies, the values of the bankrupt company are initially manageable. Signa’s real estate companies, on the other hand, would have plenty of substance.
However, not as much as at the peak of the boom. The real estate subsidiary Prime, which has not yet been insolvent, recently corrected the book value of its assets by around one billion euros to 20 billion euros.
It is questionable whether the sum could be achieved in the event of exploitation, i.e. sales. If Signa wants to sell office and retail properties on a larger scale, this is likely to put further pressure on the already tense market and force prices to fall.
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In addition, a lack of transparency also appears to have been the business principle in the valuations. Recently, there are said to have been agreements in some transactions that were not visible to outsiders.
It is said that their purpose was to keep the ratings high and thus prove the solidity of the entire Signa portfolio. In fact, the commitments would have significantly reduced the value. “Only Benko and his CFO know what the real estate is really worth,” says a Signa expert.
Who has to tremble?
Without a large group of willing donors, Benko’s magical rise would have been impossible. The Austrian has repeatedly succeeded in getting financiers excited about his lofty plans.
Their managers have been preparing for the painful return to reality in numerous meetings for weeks. Now she’s here. And with it comes the question of who has to worry about their money.
Two Austrian institutions, Bank Austria and Raiffeisenbank International, are particularly involved in the holding company. Major international banks, however, have avoided the Benko empire.
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In Germany, several state banks and even savings banks lent him money. Because of their manageable size, failures would be more serious. However, they should not reach dimensions that threaten existence.
The majority of the claims are likely to be secured by mortgages anyway. These provide a significant buffer for losses in the value of the property, so that the loan amount could be paid off through its sale.
However, not all creditors can access such security. For some, the claims should only be offset by securities or shares in other Signa companies. Their value is much more questionable.
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In addition to loans, Signa has tapped numerous other sources of financing, including bonds and participation certificates. As insiders report, some insurance companies and pension funds are said to have bought them worth three-digit millions. This was particularly attractive in times of low interest rates. The price for this is a significantly higher risk of failure.
The Signa shareholders also have to take this risk into account. In addition to prominent investors such as consultant Roland Berger, logistics entrepreneur Klaus-Michael Kühne and Fressnapf founder Torsten Töller, these also include some insurance companies and investment companies, such as R+V, LVM and Union Investment.
What’s next with the construction sites?
Numerous major Signa Group projects are currently on hold due to payment difficulties, including the Elbtower in Hamburg, as well as Signa Group projects in Berlin and Munich. It is still said that construction should be resumed quickly. But that is anything but certain – and could depend on whether investors can be found for the individual projects.
The co-shareholders in particular could be interested. In Hamburg, for example, there is speculation about Signa investor Michael Kühne as one of the rescuers for the Elbtower, in which Commerz Real also has a stake with the Hausbau fund. In addition, if construction is delayed for a long time, the city has the right to buy back the property.
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In Vienna, however, construction work on several projects appears to be continuing unchanged. Even immediately after the Signa Group’s insolvency, Vienna City Councilor Kathrin Gaál had no information about construction stops or delays in Signa Group projects.
The construction company Habau Group, which is building the luxury department store Lamarr on Vienna’s Mariahilfer Straße, also announced in a current statement: “The Habau Group has completed the construction work to 99 percent. Further steps are currently being evaluated.” Observers assume that the administrator of the insolvent companies will also have a great interest in moving forward with the construction sites, since finished projects are worth more than building ruins. The construction companies at the Elbtower, for example, have apparently already secured themselves by making reservations in the land register.
What happens to Galeria and the KaDeWe Group?
The bankruptcy initially has no direct consequences for the department store business. Operations continue. At Galeria, all of the branches that remained after its own bankruptcy are operationally profitable, it is said. Only the headquarters and the online shop still caused losses. That’s why Galeria was hoping for 200 million euros that Signa had promised the group. But the chain has leverage: it is a tenant in several Signa properties and could refuse payments.
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The KaDeWe Group is even more stable with the Berlin house of the same name, the Hamburg Alsterhaus, the Carsch House in Düsseldorf and the Oberpoillinger in Munich. Apparently it is making profits thanks to its luxury positioning.
What consequences does the bankruptcy have for Signa founder René Benko personally?
Signa founder René Benko withdrew from managing the group several years ago and has been chairman of the advisory board ever since. However, it has no corporate law function for the group.
Signa-Holding-Gründer René Benko
Quelle: picture alliance / HELMUT FOHRINGER / APA / picturedesk.com
It is clear that Benko’s majority stake has rapidly lost value. However, he is likely to have secured his private assets outside the company – unless unlawful actions were discovered in the course of the proceedings, for which there is currently no sufficient evidence.
The Austrian economist Leonhard Dobusch assumes that Benko will “in all likelihood” remain a multimillionaire or even billionaire despite bankruptcy. According to the Berlin lawyer and real estate economist Walter Späth, there could very well be legal consequences for Benko: “Mr. Benko could be personally liable, for example, if he exercised a dominant position and a significant one despite no operational function would have had economic self-interest.”
What does Olaf Scholz (SPD) have to do with it?
The involvement of the current Chancellor is a local Hamburg farce. The critics of the Elbtower in his SPD were unable to prevail against the former first mayor – and have been grappling with their defeat for years.
Now they are loudly asserting themselves again and are demanding, among other things, clarification as to why an award jury including Scholz chose Signa for what they consider to be an oversized project. The opposition from the CDU to the Left Party is happy to join in. The “Hamburger Abendblatt” recently devoted an entire page to the question – with an unflattering spin on Scholz.
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