Germany's Galeria could be next insolvency in Signa empire - sources
Reuters
Published Jan 08, 2024 07:59AM ET
Updated Jan 08, 2024 02:02PM ET
DUESSELDORF (Reuters) - German department store giant Galeria could file for insolvency again as early as this week, two people familiar with the matter said on Monday, joining the list of companies affected by the collapse of Signa founder Rene Benko's real estate empire.
The insolvency application could come as soon as Tuesday or Wednesday, according to one source. "The probability is high," said another person familiar with the matter.
A spokesperson for Galeria, which has already survived two insolvency proceedings, declined to comment. Signa Holdings, the parent company of Galeria's Switzerland-based owner Signa Retail Selection AG, did not respond to requests for comment.
The holding company of Signa - a group of some 1,000 companies, with high-profile projects and department stores across Germany, Austria and Switzerland - filed for insolvency last month with around 5 billion euros ($5.47 billion) in debt.
Other divisions have since followed suit, making Signa the biggest casualty so far in Europe's real estate crisis.
For years, the property sector in Germany and elsewhere in Europe boomed as interest rates were low and demand strong.
But a sharp rise in rates and costs has put an end to the run, tipping developers into insolvency as bank financing dries up and deals freeze.
Signa Retail Selection filed for protection from creditors at the end of November and declared its intention to liquidate its portfolio, including Galeria, which was created via the 2019 merger of the Karstadt chain with Kaufhof.
Signa Holding had committed to providing Galeria with 200 million euros, though a payment is unlikely in light of the collapse.
If the funds fail to materialize, Galeria will head for another bankruptcy, according to several sources. A new investor is also being sought for the German chain.
($1 = 0.9144 euros)
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Written By: Reuters
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