Insider information on Signa’s bankruptcy: Former Lufthansa CFO on Benko’s risk strategy

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Bankrupt Signa Holding and Signa Prime Selection sometimes published their financial statements too late; For Prime, it took five years from the reporting date, and for Holding, it took about four years. “Anyone who doesn’t publish has a problem or something to hide or both,” said former Lufthansa CFO Nikolaj Schmolcke.

According to Münchner, the Hamburg economist reports that Prime Selection, which brings together leading properties such as KaDeWe in Berlin or the Elbtower in Hamburg, publishes its consolidated financial statements for 2021 after just 22 months and for 2022 after ten months. .

According to the newspaper report, financial expert Schmolcke reads a lot from Signa’s financial statements: For example, Signa saved on real estate transfer tax through so-called “shared agreements”. Or that Prime Selection made a profit of 732 million euros (694 million francs) in 2021 on sales of only 438 million euros (415 million francs).

René Benko predicted this

The rising valuations for René Benko’s properties are striking. The founder of Signa in Tirol had the future value estimated for each of them. “Higher valuations indicate profit,” explains Schmolcke. In 2021 alone, the value of Benko’s real estate portfolio increased by one billion.

This worked because Prime Selection reports according to International Financial Reporting Standards (IFRS) and not UGB (the Austrian equivalent of HGB). According to them, real estate may be valued higher than its acquisition cost.

The financial statements also show that the company made a loss of 12.6 million euros in 2021, or Signa received a loan of 120 million euros for the Bahnhofsplatz in Munich.

Particularly striking: According to the report, the documents show that Benko took all the risks. “3.6 billion euros of the 6.7 billion euro loan volume was managed with variable interest rates. “This is like a casino, like gambling,” says Schmolcke.

If interest rates rise, costs will explode

“One percentage point higher interest rates correspond to €36 million annually.” If interest rates rise by 3 percentage points, as they have recently, this will amount to over 100 million per year. According to the information, Prime Select AG had current assets of 686 million euros in 2022, balanced by current liabilities of 2.7 billion.

In 2021, this deficit was still 1.4 billion. “This did not prevent Prime Select from paying dividends of 225 million euros.”

Schmolcke emphasizes that none of this is illegal. He summarizes: “Benko values ​​properties so much that they show profits, become attractive to investors and raise money from banks. He then pays himself 2.205 million euros in earnings.”

Financiers took this risk. “It depends on your willingness to go through with it. Creditors accepted this. “Now the bankruptcy administration will handle the rest.” (SDA)

Source :Blick