LONDON — Another division of Rene Benko’s troubled Signa property empire has filed for insolvency following the collapse of the holding company last month.
Signa Prime Selection AG, which has stakes in retailers including Selfridges, KaDeWe and Karsdadt, has filed for bankruptcy and submitted its restructuring plan to a Vienna court, according to a statement issued Thursday, Dec. 28.
The filing is the latest in a series made by companies within the Signa portfolio after the main holding declared insolvency and submitted its restructuring plan to the Commercial Court of Vienna in November.
Erhard F. Grossnigg, a spokesman for the board of Signa Prime Selection AG, said: “It is important to find long-term solutions. The quality of the Signa Prime portfolio is excellent, and the development prospects of the development projects, which are located in the top locations of German-speaking cities, are very good.”
As reported, parent Signa Holding is being managed by German restructuring specialists Arndt Geiwitz.
Signa, which purchased Selfridges in a 50/50 deal with Central Group two years ago, now has a minority share in the U.K.-based department store group.
Signa ran into trouble earlier this year amid rising interest rates, falling property prices and a slowdown in consumer consumption. Having failed to secure the appropriate liquidity to restructure, it was forced to call in the administrators, and deal directly with the courts.
Central Group immediately voiced its support for the department stores that it currently co-owns with Signa and, a few days later, took over majority ownership of Selfridges.
On Nov. 14, Central Group confirmed that it had exercised its right to convert a loan, provided by one of its subsidiaries to the Selfridges group, into equity. It is now Selfridges’ majority shareholder and also controls the joint venture company that oversees Selfridges Group.
The group comprises the Selfridges stores in the U.K., Brown Thomas and Arnotts in Ireland and De Bijenkorf in the Netherlands.
When it took majority control of Selfridges Group, Central said the move “solidified” its position as an owner-operator of the largest European luxury department store group.
Signa said it is aiming to reorganize the company’s responsibilities and liabilities “while maintaining the value” of its investments.
Last month German media had reported that Signa was preparing insolvency applications for several parts of the company.
Thursday’s statement said the aim is to keep the Signa Prime Selection operating under a restructuring plan. The appeal to the commercial court in Vienna is similar to that made by the main holding company in November.
Signa added that its Development Selection arm is also insolvent, and said it plans to submit a similar application for restructuring proceedings on Friday at the same commercial court in Vienna.
