Signa founder René Benko gives up power in the real estate group

Austrian property entrepreneur René Benko is stepping down from the management of the ailing Signa Group. As the company announced on Wednesday, the billionaire is stepping down as Chairman of the Advisory Board of Signa Holding. The German restructuring expert Arndt Geiwitz will take over the restructuring of the property and retail holding company. Benko will transfer his voting rights to Geiwitz.

"In the current situation, this is the best solution for the company, its partners, investors and employees," said Benko according to the press release. The task now is to restore trust. Signa's property portfolio remains unique. All parties involved are now called upon to support Signa.

Geiwitz said that the company now needed calm and order. Long-term solutions must be found. "It is therefore both responsible and necessary to initiate a comprehensive consolidation for the company now," said the well-known reorganiser. The quality of the property portfolio and the planned projects, particularly in Germany, is very good.

Signa is building the 245 metre high Elbtower in Hamburg, for example. The group also includes the department stores' group Galeria Karstadt Kaufhof, which has already been through two insolvency proceedings. The most recent proceedings were conducted under Geiwitz's leadership.

Higher interest rates, higher costs

Since the start of the war in Ukraine, the property sector has had to contend with increased construction and energy costs as well as higher interest rates. The rise in interest rates led to a devaluation of 1.17 billion euros at Signa Prime Selection in the previous year. This mainly affected properties in Germany, as can be seen from the consolidated financial statements of the luxury property holding company.

Signa has engaged additional external consultants to support it in carrying out a thorough review of all business areas and developing measures and a holistic concept for the group, it said.

According to the Austrian shareholder Hans Peter Haselsteiner, Benko's co-owners of the holding company had called on the billionaire to relinquish power over the company network after problems accumulated in various divisions and projects. The Signa sporting goods division, for example, filed for insolvency in October. The construction of the Elbtower was interrupted. The 46-year-old Benko had built up his group of companies with the help of low interest rates and financially strong investors.(DPA)