The takeover plan has begun: Signa is in talks to sell the Chrysler Building

An exploitation program has been initiated
Signa is in talks to sell the Chrysler Building

December 19, 2023, 4:29 pm

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Investor René Benko’s Signa Holding is facing Austria’s biggest bankruptcy to date with more than five billion euros in debt. The company has no choice but to part with the luxury property. Removing the stock in the Chrysler Building is also an option.

Signa’s ailing ownership of Tyrolean investor René Benko must divest itself of key real estate assets such as the Chrysler Building in New York in its bankruptcy proceedings. Shares in the newspapers “Kurier” and “Kronen Zeitung” are also sold. “The liquidation plan has been put in place to accelerate the sale of investments and assets,” said restructuring manager Christof Stapf at a creditors’ meeting in Vienna.

In addition to Signa Holding’s private jet use, there are also discussions about investing in Signa RFR US Selection AG, whose real estate projects include the luxury Chrysler Building. Important Signa real estate companies such as Signa Development and Signa Prime are to be consolidated – as is Signa Retail, which also includes the Galeria Karstadt Kaufhof chain of stores.

Stapf complained about Signa’s complex structures — and sometimes a lack of internal controls. Stapf is trying to get an overview of Signa’s extensive empire and now also wants to look at previous transactions. The Deloitte consulting firm is supposed to support him in the processing.

Stapf presented the first interim report

Benkos Signa Holding has filed for the largest bankruptcy case in Austria to date with more than five billion euros in debt and applied to reorganize the case under private administration on November 29. The commercial court in Vienna accepted the application and appointed Stapf as administrator of bankruptcy. In Germany, Signa’s smaller subsidiaries have also filed for bankruptcy. Locals think that other companies from the Benko empire will follow.

Stapf now presented his first interim report to the organization’s creditors’ meeting. According to this, 43 creditors have so far claimed a total of 1.13 billion euros. The company has a total of 273 lenders, including central banks and German savings banks as well as wealthy investors. Claims can be reported until January 15, 2024.

Stapf needs money to finance the difficult process – because the three million euro grant promised by Benko may not be enough, he said. Continuing the case “also requires regaining control of individual parts of the Signa group of companies, to the extent that this is still possible.” Therefore, Stapf proposed the creation of a group steering committee that would be responsible for restructuring the entire group.

Very complex structures

The company’s bankruptcy filing shows that Benko’s parent company has direct investments in 53 companies and indirect investments in several hundred other companies, it said. Signa has created very complex structures: the original organizational chart as of the end of September includes “a total of 46 pages in A3 format”.

And that’s not all: “The review has shown that there is a lack of management ability and deep knowledge in the area of ​​the central management of the group and that the holding company has recently fulfilled its regulatory function.” In addition, Signa’s activities from the past should also be looked at. Only then can it be checked if the repair plan offered by Signa is effective. After all, the representatives of Signa worked “to comply with the maintenance manager”. Self-governance in the restructuring process can remain in place. According to Austrian law, creditors must receive a share of at least 30 percent.