Cigna Group’s Next Big Insolvency: The bankruptcy of Cigna Retail GmbH, AKV, Creditreform and KSV1870 was announced on Tuesday. Debts of 1.13 billion euros with 26 creditors are offset by assets of only 1.51 million euros. Nevertheless, the company is targeting a restructuring process without self-management with 20 per cent quota within two years. “I also ask myself the question of how they want to do it,” AKV credit protector Cornelia Wesenaire told APA.
Cigna Holdings, which will enter bankruptcy in November 2023, directly and indirectly owns 95 percent of Cigna Retail. Due to the bankruptcy of the parent company, the liability obligations made at the Cigna retail level became effective, and the loan guarantors declared that they could no longer be serviced due to a lack of financing from shareholders. Cigna Retail currently has indirect investments in various corporate groups in the retail sector. These include GKK, KaDeWe Group, GLOBUS and Selfridges Group.
Cigna Retail has only one employee and no running costs, so the company’s continuation is economically viable, debt defenders say.
A whole series of bankruptcies worth billions
Since the bankruptcy of Cigna Holdings in December 2023, several subsidiaries have also gone bankrupt. In total, with liabilities of more than 10 billion euros, it is the largest bankruptcy in Austria’s economic history. Holding liabilities are 5 billion euros. This was followed by Signa Prime (4.5 billion), Signa Development (1.3 billion), German supermarket subsidiary Galeria, the KaDeWe Group, Viennese luxury department store Lamarr, currently under construction, and finally Signa founder René Benko, the sole owner, against whom €2 billion were claimed. . In total, a dozen bankruptcies in Austria and a network of more than 100 companies in Germany are said to include more than 1,000 companies.
Relaunch: Galeria wants to drop Karstadt and Kaufhof from its name
Ailing supermarket chain Galeria Karstadt Kaufhof, formerly part of René Benko’s Cigna Group, is now set to get a new name following a planned takeover by new owners. The words Karstadt and Kaufhof will be dropped at the end of July and the company will be known only as Galeria, bankruptcy administrator Stefan Denkhaus announced on Tuesday. “A lot of new branches just say Galeria on the front,” he said.
Three recent bankruptcy proceedings are closely linked to the names. That’s why they want to sever the “old braid,” Denkas said.
The management of Galeria is satisfied with the current growth of the company. “We are already in profit. It will increase when we get rid of the old rent in August,” Tenkas said. Galeria is on the road to a secure future. “We are making sure that every branch is independently profitable and able to generate its own cash flow,” said Galeria boss Olivier Van den Bossche.
© APA / Thomas Pannier
It was recently announced that 16 of the 92 branches will be closed by the end of August. A consortium consisting of American investment firm NRDC and BB Capital SA, the investment firm of businessman Bernd Peetz, wants to take over Galeria. The new owners are yet to comment on the concept or the scale of the planned investments.
Insolvency administrator Dengas recently submitted a bankruptcy plan to the responsible district court in Essen. It should show how the department store chain can be renewed and run profitably in the future.
It will be handed over by the end of July
The acquisition by NRDC and Beetz will take place only if the creditors accept the bankruptcy plan on May 28 and it is reaffirmed by the court. Denkhaus wants to hand the company over to new owners by the end of July. Galleria filed for bankruptcy in early January. This is the third bankruptcy in three and a half years. In 2014 and 2018, the Garstadt and Galleria Kaufhof supermarkets were acquired by Cigna from Tyrolean investor René Benko and merged to form Galleria Garstadt Kaufhof.
