He took over all the financial management and started analyzing the data. The company’s first assets, investments and private jet are being sold; the rental agreements for the Signa headquarters in two city center palaces have already been terminated.
It is already clear that “further safeguards are necessary” to finance the complex process. The exact liquidity requirement will be determined “this week or next week”, but is likely to be higher than the subsidies already made and promised by Signa founder René Benko of “to date a total of 3 million euros”. To date, 43 creditors have registered claims amounting to around 1.13 billion euros – the deadline for registering claims ends on January 15, 2024.
It remains to be seen whether the potential liabilities of EUR 5 billion recorded in Signa Holding’s own application would actually be registered by the creditors. Unlike Kika/Leiner, the state is not one of the largest creditors in the Signa bankruptcy, according to information from Wolfgang Peschorn, President of the Finanzprokuratur, on Tuesday in the ORF’s Ö1 “Morgenjournal”.
The previous review has shown that “there is a lack of management capacity with comprehensive knowledge in the group’s middle management area” and that “the holding company has recently only partially fulfilled its control function”.
Subject to further research, the previous review of the business transactions of the past year has revealed several business cases that are relevant for the further proceedings. Only following a comprehensive examination of these cases can the appropriateness of the restructuring plan offered be checked.
An exploitation plan has been put in place to accelerate the sale of investments and assets. Existing contracts that are not absolutely necessary are and have already been terminated – for example for the company headquarters property in the Palais Harrach and Palais Ferstel in downtown Vienna. A replacement of the investments made in buildings and inventory is being examined.
All sub-operations described as representation and acquisition – such as hunting, flying and other representation activities – were “immediately closed”. The number of employees at Signa Holding fell from 42 to 8 employees. The exploitation of the holding company’s Cessna Citation XLS private jet is “in progress”. The real estate group’s media holdings are also to be sold. Discussions are also being held regarding investing in Signa RFR US Selection AG, which owns the Chrysler Building in New York.
According to its own information, the insolvent Signa umbrella company Signa Holding GmbH alone has 53 direct investments in companies and indirect investments in several hundred other companies. According to Stapf, the group’s preliminary organizational chart as of the end of September 2023 comprises a total of 46 pages in A3 format.
In order to get an easier overview of the processes in the complicated company network, the insolvency administrator brought the consulting company Deloitte on board as independent consultants. The data backup ordered by the court “is proving to be difficult”, but has now been started with considerable delay. The external experts from Deloitte are intended to support the financial processing of the case and have been entrusted with the additional analysis of liquidity planning, the analysis of the investment portfolio and support in the handling and implementation of sales processes.
Peschorn accused Signa of “a lack of transparency” in today’s radio report. You not only have to create transparency among the Signa companies, “but especially towards consultants and so-called investors.” “A lot of things here still seem to be in the dark.” In contrast to the Kika/Leiner bankruptcy, in which the state was one of the largest creditors, the Republic was “not in the front row” with Signa, emphasized Peschorn. However, the Signa bankruptcy might cause unrest in the real estate market and lead to “the state having to intervene indirectly.” Almost every financial crisis began with real estate crises.
It is now a matter of “examining the responsibilities of all people involved”, especially the consultants who have intervened over the years. One person alone cannot create such a corporate conglomerate. One person alone cannot prevent the financial statements from being presented in the company register and create transparency for years. There are several people behind it. And they should all be identified and held accountable accordingly, said Peschorn.
The restructuring administrator is, however, endeavoring to support the stabilization of the two holding subsidiaries, Signa Development Selection AG and Signa Prime Selection AG, which are currently not insolvent. Restructuring and redevelopment efforts are ongoing. This also applies to Signa Retail GmbH, in which the trading interests are bundled. Its subsidiaries Signa Retail Selection AG and Signa European Invest Holding AG are in Swiss inheritance proceedings.
Since the company’s bodies are working with the restructuring administrator in a “motivated and focused manner”, Stapf believes that “according to the current status of the procedure, no change in the type of procedure is necessary”. Signa Holding had filed for self-administration restructuring proceedings.
The company is offering its creditors a restructuring quota of 30 percent payable within two years – that would be around 1.5 billion euros of the total 5 billion euros that Signa Holding has stated as potential liabilities.
Signa Holding filed for insolvency on November 29th, following which some Signa subsidiaries in Austria and Germany – including SportScheck and Informationstechnologie GmbH – have already slipped into insolvency. The highly integrated Signa Group with its around 1,000 companies is the biggest victim of the turbulence on the real estate market to date. In addition to increased interest rates, real estate companies are also struggling with higher construction costs and the lack of large real estate transactions. At Signa, there were home-made problems in the corporate strategy.
