Signa Prime, Kuehne in Talks on Emergency Loan to Buy Time
(Bloomberg) — Signa Prime and the holding company of logistics billionaire Klaus-Michael Kuehne are in talks about handing the insolvent property firm a lifeline as creditors meet to discuss its restructuring plan.
Kuehne Holding, a Signa Prime shareholder, and some banks are considering an emergency loan for more than €100 million ($109 million), according to people familiar with the matter. It would provide liquidity to cover bills and continue construction on developments, they said, asking not to be identified discussing private information.
Those payments may also allow Signa Prime to lift some of its real estate developments out of insolvency, which would likely lead to higher prices in potential sales, the people said.
The potential deal is the latest in a string of proposals from various stakeholders ahead of a crucial meeting of Signa’s creditors later on Monday where they will decide whether to accept a restructuring plan put forward by Signa Prime’s current management.
Under that plan, a trustee would oversee a gradual effort to sell assets as a way to repay creditors 30% of their money. Rejection of the proposal would move the company closer to a much more rapid attempt to sell the properties through outright liquidation, its administrator has warned.
Lack of funding and a lack of transparency are key reasons why some creditors have signaled opposition. Wolfgang Peschorn, the legal representative of the Austrian government among Signa Prime’s creditors, said in a radio interview on Monday that he’s planning to reject the proposal as he doesn’t believe there’s enough money and, as a result, he favors a process that’s overseen by courts.
A committee of creditors has rejected another deal that would have handed Austrian properties owned by Signa Prime to the Schoeller Group, to offset some of the German industrialist group’s other claims.
Signa Prime is the largest unit in the retail and property conglomerate founded by Austrian tycoon Rene Benko. The group was hard hit by plunging real estate values on the back of rising interest rates, and its various units started plunging into insolvency late last year.
The luxury property company, whose holdings include famous names like Selfridges in London and KaDeWe in Berlin, wants to manage, stabilize and gradually sell down assets if creditors grant their support. A court hearing is scheduled in Vienna on Monday for Signa Prime and its sister unit, Signa Development.
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Construction on some flagship buildings such as the big office property development known as Elbtower in Hamburg has been halted since the group started falling into insolvency. Many of Signa’s German properties have entered into separate proceedings, complicating efforts to restructure the parent company.
Representatives for Signa Prime and Kuehne Holding declined to comment.
–With assistance from Marton Eder.
(Adds context on restructuring plan starting in fourth paragraph)
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