Passers-by in front of a building of Signa, the Austrian construction and real estate company, on Freyung Square in Vienna, Austria, November 15, 2023 (AFP/Archives/Joe Klamar)
After a spectacular rise under the aegis of Austrian billionaire René Benko, Signa Holding, one of the most prestigious real estate empires in Europe, filed for bankruptcy on Wednesday, a symbol of the sector’s difficulties after years of cheap credit.
From the Chrysler Building in New York to the British department stores Selfriges, the 46-year-old tycoon has seen big and is now paying the price.
After worrying signals, it is a rout for its opaque holding company founded in 2000.
“Despite considerable efforts in recent weeks, it was not possible to raise sufficient funds” to avoid this scenario, the company explained in a press release.
The Vienna Commercial Court confirmed the opening of recovery proceedings, under the supervision of a receiver.
Signa Holding can thus freeze the repayment of its debts while it reorganizes the company.
Faced with the discontent of certain shareholders, René Benko withdrew in November, leaving the reins to an expert in restructuring operations, while remaining in the capital.
– From the attics to the Chrysler Building –
For the flamboyant businessman, who loved to boast of the extent of his assets, the fall was brutal.
Born in 1977 into a middle-class family in Innsbruck (Tyrol), René Benko began renovating attics as a teenager.
He found his calling. He dropped out of school to start his own business and quickly built a solid network.
Overseeing a myriad of companies, over the years he has accumulated real estate assets worth 27 billion euros, while diversifying into commerce and media.
A state of mind summed up by a slogan from the 2000s: “It has never been so boring to become rich,” the company wrote on its website, promising investors a fortune amassed without effort.
But in the meantime, the situation has changed: interest rates have increased sharply and successive crises (pandemic, war in Ukraine) have caused the costs of construction materials to soar.
Already, several subsidiaries of the group have filed for bankruptcy and emblematic projects have been suspended, particularly in Germany where Signa is very present. In Hamburg, the Elbtower construction site is at a standstill.
– Reversal of fortune –
As for its department store chains, such as Galeria Karstadt Kaufhof, the leading chain in Germany, they have been victims of the economic context and customer disaffection.
The group recently withdrew from the historic British brand Selfridges, which came under the control of the Thai Central Group.
Investments in retail “have not brought the expected success” in a context of “strong economic pressure”, Signa admitted on Wednesday, also mentioning the unfavorable development of the real estate sector.
Among the richest men in Austria, René Benko enjoyed social life and his proximity to the political class got him into trouble in the past.
In 2020, he had to testify before a parliamentary committee investigating his links to senior conservative and far-right officials as part of a massive corruption scandal. No proceedings have yet been initiated against him.
In another case, he was sentenced in 2012 to a one-year suspended prison sentence for paying bribes to former Croatian Prime Minister Ivo Sanader in a tax fraud case.
His latest setbacks have cost him half of his fortune, going from 6 billion dollars to 2.8 billion (2.5 billion euros), according to the latest estimate by the American magazine Forbes.
© 2023 AFP
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