Saudi Arabia’s sovereign wealth fund has tapped law firm Latham & Watkins LLP to advise on the lending it made to Rene Benko’s Signa group as the Austrian tycoon grapples with a cash crunch.
The Public Investment Fund has a junior debt position distributed throughout the Signa companies, according to a person familiar with the matter. Several units of Benko’s empire, including high-end property developer Signa Prime Selection, face liquidity pressures since surging interest rates sent real estate transactions plunging.
A spokesperson for the PIF declined to comment on the appointment. Spokespeople for Latham & Watkins did not immediately respond to a request for comment.
The wealth fund — chaired by Saudi Arabia’s de facto ruler, Crown Prince Mohammed bin Salman — is one of the many high-profile partners Benko tapped to fund his company’s rapid expansion. Signa’s empire includes assets ranging from a stake in New York’s Chrysler Building to part-ownership of London’s Selfridges department store.
Transportation tycoon Klaus-Michael Kuehne, pet shop founder Torsten Toeller and the Peugeot and Rausing families are among the shareholders in Benko’s Signa companies.
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With segments of the business now under pressure, the Signa Prime and Signa Development units are looking to financial advisers to manage their liquidity shortfall with creditors. Meanwhile, shareholders in the company have called on Benko to stand aside to allow Arndt Geiwitz, a well-known German restructuring expert, to take control.
The PIF has reportedly been involved in a number of Signa transactions, including backing the Signa fund that acquired a 50% stake in Selfridges, the Telegraph reported in July. A subsidiary of the PIF also invested in the now-insolvent e-commerce company Signa Sports United prior to it going public via Ron Burkle’s special acquisition company, according to company filings.
Saudi Arabia’s PIF is responsible for most of the kingdom’s projects aimed at diversifying its economy away from a reliance on oil sales. They include developing an auto-manufacturing hub, tourism projects and building vast new cities.
--With assistance from Marton Eder.
