A major Selfridges shareholder has filed for insolvency after a last-minute scramble to raise extra funds failed, including selling some of its stake in the department store.
Austrian firm Signa, which is owned by Rene Benko, admitted it could not find the “necessary liquidity” as it struggled with “severe economic pressure”.
A statement, first published on the Financial Times read: “Despite considerable efforts in recent weeks, the necessary liquidity for an out-of-court restructuring process could not be sufficiently secured.”
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The company acquired Selfridges as part of a joint venture last year in a £4bn deal with Thailand’s Central Group, which piled roughly £1.7bn in debt on the two firms.
Benko’s company had joint control of both Selfridges’s property and operating companies until recently, but Central Group took majority ownership of the trading company earlier this month.
In the same period, shareholders ousted Benko from his firm and he is now fighting for control over his £20bn empire after suffering a number of professional and personal setbacks including having his offices raided by the Austrian police.
Benko has denied wrongdoing and was not charged.
Signa still holds a 50% stake in Selfridges’ property company, which controls sites including the its flagship Oxford Street store.
It also still holds a minority stake in the Selfridges operating business.
Restructuring experts are expected to look at offloading Signa’s stakes in a drive to raise money, potentially meaning a new landlord for Selfridges’ properties.
A spokesman for Selfridges said it had the “ongoing and unwavering support of Central Group”, adding: “This does not change anything for Selfridges, we continue to operate and service our loans and lease obligations as normal. Selfridges trades independently from our shareholders.”
A spokesman for its Thai shareholder said: “Central Group remains steadfast in its commitment to safeguard and support its European luxury stores regardless of its partner’s financial circumstances.” It said it was in robust financial health and benefitted from “access to a wide range of funding streams to support the development of this unique portfolio”.
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