Financial Turbulence and Internal Conflicts Shake Signa Group Severely
The Signa Group's financial crisis reached a new peak when creditors filed claims totaling EUR 6.3 billion against Signa Prime, of which only EUR 2.6 billion were recognized by the restructuring administrator Norbert Abel. The hearing at the Vienna Commercial Court revealed that the group's financial difficulties are deeper than previously thought, with a significant proportion of the claims in dispute.
The crisis in the Signa holding is ongoing, but a conflict has arisen between the group's insolvent subsidiaries. / Picture: © Wikimedia Commons; Jochen Teufel, CC BY-SA 3.0 (https://creativecommons.org/licenses/by-sa/3.0/deed.en)
The insolvency within the Signa Group has led to internal conflicts, as reported by ORF. In particular between Signa Holding and Signa Prime Selection, with demands for more say and a review of the agreed property sales. The planned sales of high-quality properties such as the Park Hyatt and the Goldenes Quartier in Vienna are intended to contribute to the restructuring but are now up for debate.
The management of Signa Prime originally tried to secure the necessary liquidity by raising profit participation capital of up to EUR 350 million but failed due to the reluctance of existing investors. Alternative financing options amounting to 150 million euros are now being sought to bridge the most urgent financial bottlenecks.
Despite the financial uncertainties, the future of Signa Prime appears to be secure, at least in the short term, according to the restructuring administrator's announcement. The final decision on the restructuring plan and the creditors' approval of a 30 percent quota within two years is eagerly awaited and is expected to be made on March 18.
In a letter, Signa Holding has also called for an extraordinary general meeting to be convened to gain more insight into the documents of Signa Prime Selection and to review the planned property sales. The holding company is also demanding changes to the Supervisory Board and proposing new members to strengthen governance and support the restructuring efforts.
The situation is further complicated by the reorganization proceedings of SIGNA Informationstechnologie GmbH, a service provider within the Group, which is facing receivables of around 16.6 million euros. Debt relief through a restructuring plan with a ratio of 20 percent depends largely on the development of the proceedings of the other Signa companies.
Discord in the management
The managing directors of Signa Holding, Marcus Mühlberger and Christoph Stadlhuber, as well as the insolvency administrator Christoph Stapf, have demanded in a recent letter, as reported by the Austrian business magazine "Trend", an "immediate convening" of an extraordinary general meeting at Signa Prime Selection (SPS). SPS is considered the holding company's most important investment and is now at the center of the conflict.
The letter is addressed directly to the Management Board and the Supervisory Board of SPS. It complains that previous requests for access to SPS documents have not been adequately complied with. In particular, it concerns the review of recently decided disposals of prime real estate, including prominent properties such as the Goldenes Quartier and the Park Hyatt. The holding company's management is questioning whether these disposals require the approval of the Annual General Meeting, a view shared by some stock corporation law experts.
There are also calls for a restructuring of the Supervisory Board. Following the resignation of several members, Karl Samstag is also to step down. Karin Exner-Wöhrer, CEO of Salzburger Aluminium AG, and real estate expert Michael Mitterdorfer have been put forward as potential new members of the Supervisory Board.
When asked, the insolvency administrator of Signa Prime Selection was brief: "From our point of view, the cooperation between the insolvency administrators is working very well. Shareholders can, of course, request general meetings within the framework of stock corporation law."
These developments highlight the profound financial and structural problems within the Signa Group and call into question the future of one of Austria's most prominent real estate companies. The coming months will be crucial to see if and how the Group can overcome this self-inflicted unprecedented crisis.