Austrian tycoon Rene Benko’s Signa Prime unit has approached investors over the last few days seeking up to €2 billion ($2.2 billion) in funding for the coming months, according to people familiar with the matter.
The Signa unit, which co-owns the Selfridges department store in London, has told potential investors it requires €500 million to meet obligations this year alone, according to two people who are directly involved in the funding talks and asked not to be named discussing private matters. It will need another €1.5 billion of cash in the first half of 2024, the people said.
Some of those approached have already turned Signa Prime down, while others are still in the early stages of assessing the funding request, the people said. A spokesman for Signa didn’t respond to a request for comment.
The funding estimates show the magnitude of the task at hand for Arndt Geiwitz, a restructuring expert who took over as chairman of Signa’s advisory board from Benko last week. The German adviser has promised to present a restructuring plan by the end of November.
Signa Prime owns most of the luxury assets that make up Signa Holding GmbH’s €23 billion property empire, including stakes in Berlin’s KaDeWe department store and the Hotel Bauer in Venice. Rising interest rates and plunging property valuations have caused liquidity to dry up and forced construction work to stop at several development locations.
Signa has already been forced to cut its ownership share in the company that operates Selfridges after its partner, Central Group, converted a loan into equity this week. The Thai company is also in discussions to take over a joint department store project in Duesseldorf, Germany, the Rheinische Post newspaper said late Wednesday.
As part of the restructuring plans, Signa may seek to negotiate a standstill on outstanding debt until the end of January, said a third person familiar with the discussions.
Investors across units of Signa include some of Europe’s most affluent families, insurers and banks. Credit hedge fund Arini has emerged as a key holder of a €300 million public bond issued by the Signa Development subsidiary.
A group of investors holding those public bonds, as well as Saudi Arabia’s sovereign wealth fund are among creditors who have hired advisers in reaction to Signa’s funding strains.
--With assistance from Steven Arons and Giulia Morpurgo.
(Adds report on Duesseldorf department store in sixth paragraph.)
Author: Irene García Pérez, Laura Benitez and Libby Cherry
