June 18, 2024

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how tycoon behind Chrysler Building and Selfridges was forced out

2 min read

For months, rumours around the financial health of Austrian property giant Signa had been swirling. So its founder René Benko did one of the things he did best: he threw a party. 

Champagne flowed under the Christmas lights at the ultra-luxurious hotel Interalpen in Telfs, high above Innsbruck, the capital of Tyrol in western Austria where Signa is based, and the billionaire’s birthplace.

Boney M, the disco sensation known for 1970s hits such as Daddy Cool and Rasputin, regaled employees. And a defiant Benko gave a speech. 

People present said the entrepreneur sought to project an image of strength that promised an even more lucrative future than the past had delivered for his sprawling property empire.

But in the end the rumours caught up with Benko — a charismatic businessman who made his first billion before the age of 40.

On Wednesday, nearly a year after that party, Signa, one of Europe’s highest profile luxury property developers with assets worth as much as $27bn, announced it was urgently restructuring. In the process, Benko was forced out of the boardroom by his minority co-investors. 

Signa is not a household name, but many of its assets are: the Chrysler building in New York, London department store Selfridges, its Berlin equivalent KaDeWe, and countless other high-value developments in some of the most expensive metropolitan real estate in the world.

Signa bought Selfridges in a joint deal with Thai Central Group for £4bn in 2022 © Sarmento Matos/Bloomberg

Quite what the scale of Signa’s debts are remains unclear. They run into the billions, according to two people familiar with the company’s balance sheet. 

According to one Signa document seen by the Financial Times, Signa Holding — the central hub of the corporate network — was due to pay back €1.3bn in borrowing this year alone. 

The company’s ownership structure is complex: Many Signa debts, including hundreds of millions lent by European banks, on a scale that has concerned the…

2023-11-11 08:00:15

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