Signa creditors back restructuring plan to avert fire sale of top assets

By Francois Murphy and Alexandra Schwarz-Goerlich

VIENNA (Reuters) -A majority of creditors at Signa's top units, Signa Prime and Signa Development, on Monday backed restructuring plans to avert a fire sale of many of the troubled property group's most prized assets in Germany and Austria, the administrator said.

Signa, the Austrian property empire founded by Rene Benko, has become the biggest casualty so far in Europe's real estate crisis, with creditors filing claims totalling billions of euros.

The group's holding company that sits at the centre of a web of hundreds of firms has declared insolvency, as have its two main units, Prime and Signa Development.

Signa Prime comprises the most important properties, including KaDeWe in Berlin and central Vienna's Park Hyatt hotel and "Golden Quarter" that houses luxury shops.

By voting in favour of administrator Norbert Abel's restructuring plan at a meeting in a Vienna courthouse on Monday, creditors are giving a trustee up to five years to sell Prime's assets. Abel estimates this will recoup around 32% of their investment, according to a report of his seen by Reuters.

Until Monday's meeting, Prime's management had continued to run the company under Abel's supervision. It will be handed over to Abel's law firm as trustee after the restructuring plan has been legally confirmed.

Had creditors rejected the restructuring plan, the company would have gone into liquidation, effectively a fire sale of its assets that would most likely have yielded a bigger loss, or "haircut" for them, but have wound up the process much sooner.

Meanwhile, Signa Prime and the holding company of logistics billionaire Klaus-Michael Kuehne are in talks with banks about an emergency loan of around 100 million euros ($109 million), a person familiar with the matter said.

However, this potential loan was not discussed at Monday's meeting, according to creditors' associations present.

Well before Monday's vote, divisions had emerged among creditors, which include insurers, banks, hotels, other companies and private individuals, as to how best to proceed.

German and Austrian insurers had expressed irritation at the company's lack of transparency, and creditors blocked management's plan to sell some of Prime's top assets to a German bidder as some felt a better price could be obtained.

"The company can only stay afloat in the next few weeks by selling real estate," said Wolfgang Peschorn, the Austrian government's representative in the talks.

Bankruptcy would also bring some clarity to Signa's finances, he added.

($1 = 0.9200 euros)

(Reporting by Alexandra Schwarz-Goerlich and Francois MurphyWriting by Miranda Murray and Emma-Victoria FarrEditing by David Evans, Matthias Williams and Mark Potter)