Signa unit files for insolvency as crisis at Benko’s empire deepens -Spiegel

FRANKFURT (Reuters) -Signa Real Estate Management Germany filed an official application for bankruptcy at the Berlin Charlottenburg district court, German magazine Spiegel reported on Friday, as the crisis at Rene Benko’s property group deepens.

The request affects a German subsidiary of Signa Prime Selection, where tycoon Benko has collected his valuable existing properties, the report stated.

Separately, Austrian newspaper Der Standard said a bankruptcy filing for Signa Group could come next Tuesday, citing a source.

Meetings of Signa employees are planned for the same day, when employees will be given information about the insolvency and further steps, the paper reported.

Signa Group declined to comment when contacted by Reuters. The court was not immediately available for comment.

The Signa group has holdings of 27 billion euros ($28.8 billion) and 25 billion euros in development.

Dozens of banks, insurance companies and pension funds over the years have financed and invested in Signa companies, bond sale prospectuses and a Signa presentation seen by Reuters show.

The financial links are especially strong in Austria, where Signa was founded and is headquartered.

Germany, Europe’s largest economy, is in the middle of a property crisis after a sharp rise in interest rates and building costs forced some developers into insolvency and put deals and construction on hold.

(Reporting by Emma-Victoria Farr and Matthias Inverardi, editing by John O’Donnell, Elisa Martinuzzi and Louise Heavens)