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Austria property giant Signa to file for insolvency

AFP
AFP - [email protected]
Austria property giant Signa to file for insolvency
Among Signa's significant property holdings is New York's famous Chrysler building. Photo: AFP / Angela Weiss

Austrian property giant Signa -- whose vast portfolio includes New York's iconic Chrysler building -- on Wednesday announced it would initiate insolvency proceedings.

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"Despite considerable efforts in recent weeks, the necessary liquidity for
an out-of-court restructuring could not be sufficiently secured, so Signa
Holding GmbH is applying for restructuring proceedings with
self-administration," the company said in a statement.

Earlier this month, Signa said it would present plans for the company's
restructuring by the end of the month.

Rene Benko -- one of Austria's richest men -- founded Signa in 2000 and has
grown it into a conglomerate with interests from real estate to media.

In its press release on Wednesday, Signa said its retail investments "did
not bring the expected success" with the sector under "severe economic
pressure" in Europe, while also citing a "negative impact on business
development in the real estate sector in recent months".

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The company said it would initiate insolvency proceedings at a Vienna court
on Wednesday. "The aim is the orderly continuation of operational business operations
within the framework of self-administration and the sustainable restructuring
of the company," it added.

The restructuring proceedings fall under insolvency proceedings in Austria.
Several Signa projects, including the construction of a landmark high-rise
in Germany, have ground to a halt, as the construction sector is hit by higher
borrowing costs and surging material prices.

With offices in Austria, Germany, Italy, Luxembourg and Switzerland, Signa
has holdings worth 27 billion euros ($29 billion) and projects worth 25
billion euros in development, according to its website.

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