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Signa Holding, the Austrian real estate giant owned by investor René Benko, will receive a major cash injection of €600 million to meet its immediate financial obligations and drive an accelerated restructuring, according to media reports. The loan, secured at high interest rates with Signa Prime assets as collateral, is a strategic measure to manage a significant debt repayment of €1.5 billion that matures in mid-2024. In the midst of these financial maneuvers, René Benko resigned from his leadership roles within the company.
Swiss private banking group Julius Baer is under the supervision of Finma due to its significant risk exposure from loans to Benko’s Signa Holding GmbH. With European Central Bank directives forcing banks like Julius Baer to reassess their loan portfolios, concerns are growing about liquidity problems and falling commercial property values. Julius Baer had already set aside 70 million francs for possible losses at the beginning of November and recorded a write-down of 82 million francs linked to the financing of Signa’s acquisition of Globus. This measure reflects the bank’s attempt to mitigate the risks associated with potential defaults.
These events have had a notable impact on the financial markets, especially affecting Julius Baer. The bank saw a sharp 12% drop in its share value on Monday, echoing the type of market volatility seen during the pandemic. This decline signifies growing investor unease regarding Julius Baer’s entanglement with Signa’s financial challenges.
As Signa Holding navigates this turbulent period, the company has brought in a business restructuring specialist to lead the way forward. The firm urgently needs approximately €500 million to cover its immediate financial needs and is seeking an additional €1.5 billion by mid-2024. This need arises amid a slowdown in commercial real estate markets, which has significantly affected asset valuations and has increased the urgency of strategic financial planning.
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