FRANKFURT (Reuters) – Further subsidiaries of Austrian property group Signa are expected to file for insolvency as soon as this week, a person with direct knowledge of the matter said on Monday, following such a filing by a subsidiary late last week.
Signa did not immediately respond to a request for comment.
On Friday, Signa Real Estate Management filed for insolvency in a local court in Berlin, several people with knowledge of the matter said.
The Austrian property giant has been caught up in a European property rout, triggered by the steepest rise in borrowing costs in the euro’s 25-year history, a crash that hit Germany and Sweden hardest.
Construction by Rene Benko’s property company Signa had already halted at six sites in Germany, including one of the country’s tallest buildings, encompassing plans for nearly 200,000 square meters in space.
Signa, which is an owner of New York’s Chrysler Building, had been making steady progress this year on the planned 64-story Elbtower skyscraper in Hamburg, until it stopped paying the builder, who halted work.
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 Matthias Inverardi; writing by John O’Donnell; editing by Sabine Wollrab and Miranda Murray)
