Austrian property tycoon René Benko ousted from Signa

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Billionaire property developer René Benko has been ousted from his real estate empire Signa amid a cash crunch that threatens to hit European lenders exposed to the indebted Austrian group. 

Speaking to Austrian state television on Friday afternoon, Signa investor Hans Peter Haselsteiner said he and other investors in Signa took note of Benko’s departure “in an affirmative and positive manner”. 

Haselsteiner said a “far-reaching solution” was now needed for Signa. 

Benko’s ousting was first reported by the Austrian newspaper Kronen Zeitung, which Benko partly owns. Signa, which has long denied suggestions of any financial problems, did not respond to several requests for comment. Benko could not be personally reached for comment.

Signa, which says it owns a leveraged portfolio of assets worth €27bn including joint ownership of Selfridges in London, KaDeWe in Berlin and the Chrysler Building in New York, is seeking to restructure its operations. It is in discussions with its major shareholders about an emergency lifeline, two sources familiar with the company’s finances said.

Arndt Geiwitz, the prominent German insolvency expert who was called in to restructure Lufthansa in 2020, has been appointed by the Innsbruck-headquartered company to try to find a financial solution to its problems.

A collection of hundreds of corporate entities linking back to Liechtenstein-based trusts, Signa has been facing headwinds for more than a year.

Galeria Karstadt Kaufhof, which Signa owned, filed for insolvency last year, triggering public anger at Benko as Germany’s largest department store chain cut thousands of jobs.

Signa insisted it was financially insulated from problems in its portfolio, stressing its prime assets — ultra-luxury developments around Europe known as “Signa Prime” — have retained their value amid growing vacancies across Europe’s commercial property and retail market.

Other problems have stymied efforts to raise funds. Signa’s offices were raided by Austrian police last year as part of a sprawling probe by Austrian prosecutors into high-level corruption. In February, Deutsche Bank cut ties with the company over concerns about the financial and reputational risks of keeping it as a client.

In recent weeks, revelations have deepened concerns over the group’s liquidity. A €150mn lifeline to Signa Sports United, its struggling online retail sports division, was cancelled last month, forcing the NYSE-listed company into bankruptcy. 

And work on the Elbtower in Hamburg, a €700mn project to erect the third-tallest building in Germany, was halted last week because Signa stopped paying workers’ salaries.

Benko built Signa over the last two decades, becoming a billionaire by the time he was 40. His personal fortune was estimated by Forbes this year at €6bn.