Signa Holding, Major Owner Of NYC's Chrysler Building, Files For Administration

Property giant Signa Holding, which owns a significant portion of New York’s Chrysler Building and a large share of Germany’s major department stores, as well as part of London’s Selfridges, has filed for administration.

The move has prompted lenders across Europe to evaluate their exposure to the business empire of Austrian billionaire René Benko, the Financial Times reported. This complicated situation is being considered as one of the most intricate corporate restructurings since the financial crisis.

According to a statement from the heavily indebted group, Signa Holding has applied for self-administration, an Austrian corporate law procedure enabling the company to restructure itself without surrendering control to an external administrator. The company admitted that despite substantial efforts, sufficient liquidity for an out-of-court restructuring could not be secured.

Signa’s intricate network, which includes over 1,000 corporate entities and trusts throughout Europe, the US, and offshore, remains operational. Entities like Signa Prime, said to hold the group’s most valuable assets, are still up and running.

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Of the 120 banks exposed to Signa, major lenders include Switzerland’s Julius Baer and Credit Suisse, Austria's Raiffeisen, Bank of China, France's Natixis, and Italy's UniCredit. Signa’s total debt to lenders is estimated to be at least €13 billion ($14.4 billion), according to JPMorgan analysts.

Signa’s administration could potentially disrupt central Europe’s retail sector, given the company’s ownership of key department stores in the region. However, some of these stores, including Selfridges and Germany’s Galeria Karstadt Kaufhof (GKK), have assured that they remain unaffected by Signa’s financial turmoil.

Signa-owned businesses employ about 40,000 people, per company presentation in 2022. The group’s assets are estimated to be worth €27 billion ($29 billion), with another €25 billion ($27 billion) in projects in its pipeline.

Signa’s financial difficulties have been ongoing for over a year, with a debt-fuelled business model hit hard by rising interest rates. This year, the group was due to pay back €1.3 billion ($1.4 billion) to lenders, a task it has struggled to meet.

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Chrysler Building. Image Via Shutterstock