(Bloomberg) -- A court-appointed administrator and creditors at the largest units of Rene Benko’s Signa group allowed managers stay in their roles despite faltering efforts to raise fresh capital.

Investors of Signa Prime and Development haven’t committed to injecting fresh capital, forcing the companies to turn to asset sales as an alternative source of liquidity, board member Erhard Grossnigg told reporters after creditor meetings for both companies in Vienna on Monday.

The company has enough funding to continue in self-managed insolvency for now, Cornelia Wesenauer, a member of the creditor committee and regional head of insolvency at the AKV Europa association, said at the courthouse. The committee will assess which properties can be sold to generate additional funds, she said.

Despite getting the green light to move forward with restructuring plans, the Austrian property empire’s future remains unclear and the comments reflect the precarious state of affairs with €350 million ($383 million) needed to keep the company afloat.

Administrators have primarily been focused on understanding how liquidity could flow from the sale of individual projects properties toward the parent, Wesenauer said.

That would be a precursor to any overhaul efforts. As a matter of principle and in the interest of creditors, a restructuring is favored over dismantling the company, insolvency administrator Norbert Abel said in a statement.

Monday’s meeting was the first of its kind for Signa Prime, which over the course of two decades lapped up about €20 billion of prime European real estate assets, including the Selfridges department store in London and Berlin’s KaDeWe. 

The clock began ticking for Signa Prime and Development when they filed for insolvency on Dec. 28. Both companies were granted 90 days to convince a majority of creditors to back a restructuring plan that will pay back at least 30% of liabilities within two years, though an extension may be possible on technical grounds.

As the largest corporate insolvency in Austria’s history, Signa’s meltdown could pit some of the world’s most prominent creditors — including Saudi Arabia’s Public Investment Fund and a broad range of European banks — against company management and core shareholders such as Rene Benko and construction tycoon Hans Peter Haselsteiner.

On Saturday, supervisory board chair Alfred Gusenbauer sought to temper criticism over the role of Signa management in the financial meltdown, pointing instead to headwinds in the broader property market and misguided retail investments.

--With assistance from Libby Cherry.

(Adds comment from Signa board member in second paragraph, background from fifth.)

©2024 Bloomberg L.P.