The ailing real estate and trading group Signa has dismissed the CEO of its most important sub-companies. In extraordinary supervisory board meetings of Signa Prime Selection AG and Signa Development Selection AG, their boss Timo Herzberg was relieved of his functions with immediate effect and terminated without notice and without notice, announced the Signa Group in Vienna, founded by billionaire René Benko.
The reasons for the dismissals were an urgent suspicion of gross violations of duties as a board member, it said. The renovator Erhard Grossnig will take on the role of board spokesman in both real estate companies that are to be renovated and restructured. Several Signa group companies had recently filed for bankruptcy.
Disused construction projects in Berlin and Hamburg
“Unfortunately, we had to make this decision and take this tough step. The suspicion was clear and left the supervisory boards no other choice,” said the chairman of the two companies’ supervisory boards, Austria’s former chancellor Alfred Gusenbauer. Especially in challenging times, 100% trust in the people involved and unity in decisions are required.
The most important properties and construction projects in the Signa portfolio belong to Signa Prime – including the currently standstill Elbtower construction project in Hamburg, the KaDeWe in Berlin and department store properties from the Galeria Karstadt Kaufhof chain. Signa Prime posted a loss of around one billion euros last year and had around 10.8 billion euros in debt at the end of 2022. Signa Development posted a loss of 316 million euros.
During the low interest rate phase of the past few years, Benko was able to take out cheap loans and attract financially strong investors in order to significantly expand his group. The recent rise in interest rates, construction costs and energy prices have put his complex network of companies in dire straits.
