The ailing Signa Group has now also started insolvency proceedings for its real estate companies, including the real estate of retail chain Galeria and of KaDeWe in Berlin. The retail branch has been insolvent for a month.
11 billion euros of debt
One by one, the parts of Signa file for insolvency after major liquidity problems emerged in the real estate empire of Austrian Benko this autumn. The latest to fall is Signa Prime, which has a lot of important commercial real estate in its portfolio, such as the properties housing department store chain Galeria Karstadt Kaufhof and Berlin icon KaDeWe.
Signa Prime is said to own twenty billion euros worth of real estate, but it has a debt of eleven billion euros. CEO Erhard Grossnigg has now said that “despite considerable efforts in recent weeks”, the necessary liquidity for an out-of-court restructuring could not be secured. The CEO now hopes that the insolvency proceedings can help him find long-term solutions.
Retail branch already insolvent
The next to file for insolvency will be Signa Development, a subsidiary worth 4.6 billion euros. Like the rest of the group, it hopes to continue business operations under its own, separate management after the restructuring.
Signa Retail, which owns the Galeria department store chain, had filed for insolvency a month ago. That company will be liquidated, which is likely to put Galeria on display. However, the chain already halved its footprint last year after ongoing financial problems. Galeria also already put Inno up for sale this autumn, hoping to that chain safe for the time being.