Austrian real estate holding Signa has filed for bankruptcy
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On Wednesday, November 29, the Austrian holding Signa Holding, which manages luxury real estate in Europe and the USA, filed to the Vienna Commercial Court filing for bankruptcy and starting the restructuring process. According to JPMorgan estimates, the company’s total debt exceeds €13 billion, and about 120 banks are its creditors in one way or another.
Signa previously tried to raise funds to refinance its debt, but this failed, so it had to turn to bankruptcy proceedings. At the same time, the company decided not to go under external management. Austrian legislation provides for an option in which a company can go through restructuring on its own. Within 90 days, it must prepare a restructuring plan, but if it does not satisfy its creditors, it will still go under external administration.
Signa is Austria’s largest private real estate holding company, owned by Austrian billionaire Rene Benko. Signa manages, among other things, the New York skyscraper Chrysler Building and many elite European department stores, including the famous Berlin KaDeWe, the German chain Galeria Kaufhof. The company is also one of the owners of the British department store chain Selfridges. It was previously reported that the assets under management of Signa are estimated at a total of €27 billion.
Signa’s bankruptcy could have a major impact on the European market. The company owns and operates many properties in different countries through trust companies. “This could be one of the most complex corporate restructurings since the global financial crisis. Debt is issued all over the place and I don’t think anyone, not even insiders, knows who owns what.” The Financial Times an Austrian lawyer close to Signa. As Raiffeisen Bank International analysts noted, if Signa begins to sell the real estate it owns, this could cause a general drop in prices in the commercial real estate market.
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