The major real-estate firm will apply on Thursday for the opening of reorganization proceedings with self-administration. Signa's German subsidiary has also filed for insolvency.
Signa, Austria's real-estate giant, announced on Wednesday that it plans to file for insolvency, after its German subsidiary took the step.
The holding company will apply for the opening of reorganization proceedings with self-administration to the Vienna Commercial Court on Thursday, it said.
"Despite considerable efforts in recent weeks, the necessary liquidity for an out-of-court restructuring could not be sufficiently secured, so Signa Holding GmbH is applying for restructuring proceedings with self-administration," the company said in a statement.
Why is the real-estate giant suffering?
Once a strong property and retail group, the firm has been in crisis for weeks.
Its troubles began with the start of Russia's war in Ukraine, which affected the property sector across Europe due to increased construction and energy costs, as well as higher interest rates.
The group owns numerous commercial properties in Germany and Austria, with a vast portfolio including New York's iconic Chrysler building. In Germany, it owns the struggling department store group Galeria Karstadt Kaufhof, and is building the 245-meter high Elbtower in Hamburg.
Galeria, however, does not expect to be affected by the insolvency proceedings, the Reuters news agency quoted an anonymous insider from the department store as saying.
The firm's owner, retail entrepreneur Rene Benko, announced he was stepping down as chairman of the Signa Advisory board earlier in November, succumbing to shareholders' pressure.
Source: Dw
Comments