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Just €250mn of the €5.26bn of debt owed by the company at the centre of René Benko’s collapsing property empire had been secured against tangible assets, said its administrator, raising fresh questions about how much lenders to the group could expect to recoup.
Christof Stapf, a Viennese insolvency lawyer, said on Thursday he was taking over the running of Signa Holding after the company’s management failed to put together a viable restructuring plan in the two months since it entered administration.
Signa Holding was the ultimate parent company in a web of more than 1,000 corporate entities, which together are estimated by analysts to owe in excess of €13bn to creditors.
It applied for “self-administration” under Austrian law, a procedure by which its management would seek to restructure the company themselves.
But a lack of clarity about how much the holding company would be able to recoup from its two most important subsidiaries, Signa Prime and Signa Development, complicated the process.
Stapf said he hoped to be able to put together his own restructuring proposal — one that is likely to be less favourable to Signa Holding’s shareholders, including Benko — by April.
The disclosure of Signa Holding’s collateral position adds to concerns about the exposure of backers, including Swiss banks, German insurers and some of Europe’s most prominent family offices, to a group where Benko maintained opaque finances for many years.
“All claims are being examined. The [recoverable] amount will depend on the result of negotiations about the restructuring plan,” said Stapf. Less than 5 per cent of the company’s debts were secured, he added.
The Financial Times revealed on Thursday how one Signa company had transferred more than €300mn to entities connected to the Austrian billionaire’s family before its collapse.
Signa Prime and Signa Development own the bulk of the group’s most valuable assets — dozens of development properties and a portfolio of ultra-luxury addresses that include some of the most famous department stores, hotels and luxury shopping locations in Europe.
While Benko kept control of Signa Holding, third-party shareholders in Signa Prime and Signa Development have in effect frozen him out and are conducting their own restructuring processes.
Signa Holding is in the process of trying to liquidate the assets over which it does have direct control: a 50 per cent stake in New York’s Chrysler Building, and its shareholding in Selfridges, the London department store.
“The restructuring administrator and the expert consulted by him are conducting the related sales negotiations or are fully involved in them,” said Stapf.
“Viewed from the current standpoint, it is anticipated that a portion of these sales transactions will be finalised by the end of April.”