Billionaire Benko Turns to German Banks for Signa’s Funding

(Bloomberg) -- Billionaire Rene Benko is in talks with regional German banks to sell a niche debt product to local investors, the latest effort to raise money for his real estate and retail group Signa, according to people familiar with the matter.

Talks are in progress to issue a Schuldschein loan -- a promissory note that’s marketed to local savings banks, commercial lenders and insurance funds, without requiring a formal rating -- but no mandate has been given, the people said, asking not to be named because they’re not authorized to talk about it.

The Austrian financier has also been in talks with international banks to sell at least 300 million euros ($364 million) of bonds out of units Signa Development Selection and Signa Prime Selection. Issuing a Schuldschein loan could be easier because German investors and lenders are familiar with Benko and Signa, the people said.

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A lawyer representing Signa wrote in an email to Bloomberg News that the company is permanently in talks with banks about financing arrangements and declined to elaborate further on any plan.

Benko controls a sprawling conglomerate of real estate and retail subsidiaries, loosely grouped under the Signa brand, which have traditionally raised equity and debt funding from private investors. The financier has been seeking to tap capital markets amid protracted pandemic lockdowns, which have hurt its department store unit.

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Signa’s Galeria Karstadt Kaufhof, Germany’s largest chain, is in negotiations with the government for a 460 million-euro rescue loan after it restructured debt, closed sites and received an equity injection from Signa in 2020. The department store subsidiary is the second largest tenant to Benko’s real estate unit Signa Prime.

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