Austrian Billionaire Due Big Payout After Real Estate Revaluation

(Bloomberg) -- Austrian property billionaire Rene Benko and his outside investors are set for a big payout after his trophy-asset unit revalued assets to double net income.

Signa Prime Selection AG, which owns luxury retail sites including Berlin’s KaDeWe and Vienna’s “Golden Quarter,” plans to pay 201 million euros ($237 million) in dividends, the company said in a document on its closed-door shareholder meeting, which was filed to the Austrian company register. The payment is due by the end of 2020.

The bumper payout for last year’s results was decided while Benko was in talks with creditors, landlords and staff of his struggling German department store unit Galeria Karstadt Kaufhof GmbH to accept cuts in rent, wages and pensions. Signa Prime owns some of the sites where the chain has stores.

The record dividend -- a third higher than the distribution a year earlier -- comes as the coronavirus crisis prompted other retail landlords like Unibail-Rodamco-Westfield, Europe’s biggest, to scrap dividends and sell shares and assets to raise cash.

Signa Prime -- a critical cog in Benko’s complex web of property, retail and media holdings -- booked value adjustments of 933 million euros, fueling a surge in 2019 consolidated net income to 838 million euros.

The valuation change was equivalent to three times Signa Prime’s revenue of 310 million euros last year, according to the annual report that was prepared for the July meeting. The document for the closely held company hasn’t been released previously to the public.

Signa Prime’s sister company Signa Development Selection AG distributed 98.6 million euros for 2019.

The results cover a year in which Signa Prime acquired the remaining 50% of the Kaufhof department stores in Germany from partner Hudson’s Bay Co. The unit’s total assets advanced by about half to 15 billion euros.

Through holding companies and trusts, Benko controls the majority of Signa Prime. The top shareholders are:

• Benko-controlled vehicles 54%
• Madison International Realty 7.2%
• RAG Foundation 6%
• Peugeot Freres, R+V Lebensversicherung, Hans-Peter Haselsteiner, Klaus-Michael Kuehne 5% each

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