The administrator of the company that is at the heart of Rene Benko’s crumbling property empire said only €250mn out of €5.26bn in debt had been secured by tangible assets. This raises new questions about the amount of money lenders can expect to recover.
Christof Stapf is a Viennese lawyer who specializes in insolvency. He announced on Thursday that he would take over the management of Signa Holding, after the company failed to come up with a viable restructuring strategy in the two-month period since the company entered administration.
Signa Holding is the ultimate parent of a network of over 1,000 corporate entities that analysts estimate collectively owe creditors more than €13bn.
It applied for “self-administration” under Austrian law, a procedure by which its management would seek to restructure the company themselves.
The process was complicated by a lack clarity on how much money the holding company could recoup from Signa Prime and Signa Development.
Stapf stated that he hopes to have his own restructuring plan, which is less favorable to Signa Holding shareholders including Benko by April.
Signa Holdings’ disclosure of its collateral position has raised concerns over the exposure of investors, such as Swiss banks, German insurance companies, and some of Europe’s most prominent family office, to Benko’s group, where Benko had maintained opaque financials for many years.
All claims are being investigated. Stapf said that the [recoverable] sum will depend on the outcome of the negotiations regarding the restructuring plan. He added that less than 5% of the debts of the company were secured.
On Thursday, it was revealed that a Signa company had sent more than €300mn in transfers to entities linked to the Austrian billionaire family’s family prior to its collapse.
Signa Prime, Signa Development and the Group’s other assets are a collection of development properties as well as a portfolio that includes some of Europe’s most prestigious department stores, luxury shopping centers and hotels.
Benko, who controlled Signa Holding and Signa Prime, has been effectively frozen out by third-party investors in Signa Prime. Signa Development is also undergoing its own restructuring.
Signa Holding has begun the process of liquidating the assets that it controls directly: its 50% stake in New York’s Chrysler Building and its shares in Selfridges in London.
Stapf said that “the restructuring administrator and expert who was consulted by him conduct the sales negotiations related to the restructuring or are fully engaged in them.”
From a current perspective, it’s expected that some of these transactions will be completed by the end April.”