Signa Holding’s billion-dollar tumble into insolvency is complete.
Rene Benko’s main holding company filed for the bankruptcy-like procedure in Austria, the Wall Street Journal reported. Benko’s property portfolio, once valued as high as $30 billion, is faced with an uncertain future as Signa restructures and Benko cedes control to a restructuring manager.
Among Signa’s major holdings are stakes in large European department stores, luxury British retailer Selfridges and the Chrysler Building in Manhattan, which Benko purchased in partnership with Aby Rosen’s RFR Holding in 2019. A spokesperson for RFR said the company would happily increase its stake should Signa need to lighten the load.
Benko’s investments didn’t cease when the property market slumped and interest rates rose, one possible explanation for why Signa became insolvent. Benko teamed with Thailand’s Central Group to buy Swiss luxury department-store chain Globus after the pandemic’s onset, followed in 2021 by the purchase of most of Selfridges.
JPMorgan Chase analysts estimated that Signa’s two largest subsidiaries carried more than $14 billion in debt and liabilities. More than $4.5 billion of that is floating rate debt. More than $1 billion of the debt was slated to come due this year, another 37 percent set to mature in the next four years, according to JPMorgan.
Swiss bank Julius Baer has roughly $690 million lent to Signa, while Austrian bank Raiffeisen Bank International is exposed to the tune of $830 million.
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Signa’s collapse is significant enough that the European Central Bank is monitoring the insolvency procedure for broader ripple effects.
The 46-year-old Benko’s rise was nearly as quick as his fall. He started his real estate business by renovating apartments before acquiring a majority of the Karstadt department-store chain in 2012, expanding rapidly from there.
He’s also had some legal troubles, including a tax fraud conviction that year after allegedly trying to bribe Italian officials. This year, Benko was acquitted on bribery charges in Austria.
— Holden Walter-Warner