German retail holding Galeria says it may not pay rent to its owner, the ailing Signa group. That real estate fund is in financial troubles and looks destined to go bankrupt.
Reducing risks
The real estate empire of Austrian businessman René Benko is on the verge of collapse: its subsidiary Signa Real Estate Management Germany filed for bankruptcy on Friday, after other companies in the group had already done the same.
Signa also lost Selfridges as Thailand’s Central Group took over the majority stake in what used to be a joint venture between Central Group and Signa. Benko already had to step aside as CEO, while a restructuring expert has been appointed.
Meanwhile, German department store group Galeria (which is looking to sell its the Belgian Inno chain) is bracing itself. Galeria Karstadt Kaufhof is preparing for a possible bankruptcy of parent company Signa, according to German media, and is closely monitoring the situation. Depending on the situation, Galeria is considering suspending rent payments in December. This way, the department store group, which recently underwent heavy restructuring itself and is certainly struggling financially, wants to avoid ending up at the back of the queue of creditors in case of bankruptcy.
