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Billionaire property developer René Benko has been ousted from his actual property empire Signa amid a money crunch that threatens to hit European lenders uncovered to the indebted Austrian group.
Talking to Austrian state tv on Friday afternoon, Signa investor Hans Peter Haselsteiner mentioned he and different buyers in Signa took word of Benko’s departure “in an affirmative and constructive method”.
Haselsteiner mentioned a “far-reaching resolution” was now wanted for Signa.
Benko’s ousting was first reported by the Austrian newspaper Kronen Zeitung, which Benko partly owns. Signa, which has lengthy denied options of any monetary issues, didn’t reply to a number of requests for remark. Benko couldn’t be personally reached for remark.
Signa, which says it owns a leveraged portfolio of belongings price €27bn together with joint possession of Selfridges in London, KaDeWe in Berlin and the Chrysler Constructing in New York, is looking for to restructure its operations. It’s in discussions with its main shareholders about an emergency lifeline, two sources accustomed to the corporate’s funds mentioned.
Arndt Geiwitz, the outstanding German insolvency professional who was referred to as in to restructure Lufthansa in 2020, has been appointed by the Innsbruck-headquartered firm to attempt to discover a monetary resolution to its issues.
A group of tons of of company entities linking again to Liechtenstein-based trusts, Signa has been dealing with headwinds for greater than a 12 months.
Galeria Karstadt Kaufhof, which Signa owned, filed for insolvency final 12 months, triggering public anger at Benko as Germany’s largest division retailer chain reduce 1000’s of jobs.
Signa insisted it was financially insulated from issues in its portfolio, stressing its prime belongings — ultra-luxury developments round Europe generally known as “Signa Prime” — have retained their worth amid rising vacancies throughout Europe’s industrial property and retail market.
Different issues have stymied efforts to lift funds. Signa’s workplaces had been raided by Austrian police final 12 months as a part of a sprawling probe by Austrian prosecutors into high-level corruption. In February, Deutsche Financial institution reduce ties with the corporate over issues concerning the monetary and reputational dangers of protecting it as a shopper.
In latest weeks, revelations have deepened issues over the group’s liquidity. A €150mn lifeline to Signa Sports activities United, its struggling on-line retail sports activities division, was cancelled final month, forcing the NYSE-listed firm into chapter 11.
And work on the Elbtower in Hamburg, a €700mn challenge to erect the third-tallest constructing in Germany, was halted final week as a result of Signa stopped paying staff’ salaries.
Benko constructed Signa during the last twenty years, changing into a billionaire by the point he was 40. His private fortune was estimated by Forbes this 12 months at €6bn.
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