"Only to the detriment"

Signa Holding already broke when buying Selfridges

The takeover of the British department store chain Selfridges was actually no longer manageable for Signa.

(Bild: picturedesk.com/HOLLIE ADAMS / AFP / picturedesk.com)

Signa Prime insolvency administrator Norbert Abel criticizes former managers of the company for transactions relating to the purchase of the British department store chain Selfridges at the end of 2021 and 2022. According to a lawyer's letter, Prime entered into contracts with Signa Holding, "which was obviously not in a position" to handle the purchase. 

Abel reports on follow-up agreements between the Signa companies that were exclusively to the detriment of Prime. Specifically, Signa Prime acquired the Selfridges trophy property company in London and Manchester, whereby Signa Holding acquired half of the shares in the British Selfridges Group and thus the retail division.

Signa Prime gave ailing holding company monster loan
Signa Prime had granted the holding company a loan of around 463 million euros for financing purposes - money that was to be repaid by the holding company at the end of 2022, but which, according to Abel, was not raised by the company, which was "materially insolvent" at the time.

Abel: money shifted to "clean up" the balance sheet
In order to finance the purchase of the real estate company, the owners of Prime decided on a capital increase, according to the liquidator. In this regard, it should have been clear to the management board "already at this point" that the newly injected capital would flow back to the holding company "to a considerable extent" due to the loan agreement. In order to "get the loans due off Signa Holding's books", Prime acquired two of the holding company's financing companies in December 2022 in "a convoluted and complex, multi-stage transaction", the purchase price of which was "offset against the outstanding loan receivables".

According to Abel, the "sole purpose" of these transactions was to "clean up" the holding company's annual balance sheet. There was "no operational or business benefit whatsoever" for Prime. Moreover, the purchases of the two companies - which, according to Abel, were primarily financing vehicles within the group - were "exclusively detrimental" to Prime. "No outside third party would have paid a serious amount for such companies (...)." It was therefore obvious that the Management Board did not deal with the value of the acquired shares, the effects of the transaction on Prime's liquidity "or other relevant information", according to Abel's judgment.

Criticism of former supervisory board members
Abel is also harshly critical of Prime's former Supervisory Board members, including the former Chairman of the Supervisory Board and former SPÖ Chancellor Alfred Gusenbauer, in connection with the money transfers. For example, the approval to enter into contracts with the holding company was preceded by "no discussion whatsoever in the Supervisory Board", "it was simply 'waved through'". Similarly, the supervisory body had not discussed why the holding company would give up the "business opportunity" (through the purchase of the Selfridges properties, note) to Prime.

Gusenbauer chaired the supervisory boards of the most important Benko companies until just under a year ago: He presided over the controlling bodies of Signa Prime Selection and Signa Development Selection AG for many years and until their collapse. Both core companies of the deliberately opaque Signa Group have been insolvent since the end of 2023, with debts totaling tens of billions of euros - we reported.

Abel's criticism of the management, according to which the acquisition of the financing companies was an "inadmissible loan agreement", is ultimately directed equally at the Supervisory Board, which subsequently approved the transactions. After all, the latter had not properly dealt with the consequences for Prime either: "Not a single question in this regard was documented", the lawyer's letter states.

Signa shares sold in the meantime
The Signa shares in the Selfridges Group have since been sold. Since October 2024, the Saudi Arabian Public Investment Fund (PIF) has owned 40 percent and the vast majority (60 percent) belongs to the Thai Central Group. The ownership structure applies to both the operating companies and the department store group's real estate companies.