René Benko’s Signa Group Resolves Bankruptcy with 20 Million Euro Deal for Kika/Leiner Furniture Chain

In the restructuring process for the insolvent furniture chain Kika/Leiner Former owner René Benko reached a deal. The “Kurier” reported with reference to insiders that Signa was paying 20 million euros into the quota pot for the insolvency proceedings. This will happen in four installments within two years.

This means that Benkos Signa pays one Special quota for creditors of 15 percent. But that should be the end of the issue. According to the report, all claims of the masses against Signa will be settled. The deal is said to have been finalized on Monday.

Loss of billions for Benko

There has been a lot of unrest surrounding Benko’s real estate empire in recent weeks. His most important company, Signa Prime Selection AG, had to close in the 2022 financial year absorb a net loss of around one billion euros. Reason for this: The values ​​of the real estate have been corrected significantly downwards. The company itself spoke of “exclusively macroeconomic circumstances”.

Given falling real estate prices, the valuations at which the company has its properties on its books are falling. At the same time, financing costs have risen significantly due to higher interest rates. The European Central Bank (ECB) has been checking banks for several months regarding their business relationships with and lending to Signa. Most recently, insiders reported that the ECB was even advising banks to at least partially write off Benko loans in order to prepare for a possible default.

According to the “Handelsblatt”, the total value of the properties is still at 20.4 billion euros. The majority of the properties are financed with a fixed interest rate of 2.7 percent for 18 years anyway – so last year’s interest rate increases would not affect them.

Benko’s portfolio includes the luxury department stores KaDeWe in Berlin, Alsterhaus in Hamburg and Oberpollinger in Munich, but also the Park Hyatt Hotel in Vienna. The Golden Quarter, a luxurious business district in downtown Vienna, is also expected to be one of these long-term financed properties. In Vienna, Benkos Signa owns, among others, the Postsparkasse, the Kunstforum and the former Leiner branch on Mariahilfer Straße, which Benko converted into the luxury department store “Lamarr”.