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Administrators at René Benko’s collapsed European property empire are seeking €350mn from investors to forestall a painful fire sale of assets in the coming weeks.

Signa Prime and Signa Development, the two holding companies that own the bulk of the wider Signa Group’s property assets, wrote to shareholders just days before Christmas urging them to stump up fresh capital, according to a copy of the letter seen by the Financial Times.

Erhard Grossnigg, the companies’ administrator, said hundreds of millions of euros were needed “quickly” to tide the companies over until April and avoid writedowns.

Signa confirmed the figure but declined to comment further on the content of the letter. A spokesperson for Grossnigg declined to comment.

Without the money, the two businesses will have no option but to try to sell their assets in an already troubled commercial property market.

Both filed for insolvency on December 28, with debts of €5.6bn.

Their parent company, Signa Holding, was the first domino to fall in Benko’s sprawling property empire — a network of more than 1,000 different companies, foundations and trusts — when it entered insolvency in November. It owes a further €5bn. The total debts owed by the Signa Group are unknown but estimated by analysts to be in excess of €15bn.

The needs of Signa Prime are most pressing in the short term, with the group requiring €300mn, according to the letter. The company owns some of Benko’s most prized assets, which include the half-finished Elbtower in Hamburg, Germany’s third-largest skyscraper, as well as luxury department stores in the country’s biggest cities, and some of the most valuable real estate in Vienna.

The FT reported last month that Signa Prime had already taken a steep discount on its most prized property, as it struggled to stay afloat last year.

The company sold half of the KaDeWe building in Berlin — the city’s most famous department store — to Thailand’s Central Group, which already owns half of the KaDeWe operating company.

The building was valued by Signa Prime at more than €1.5bn. It has a €500mn mortgage against it. The 50 per cent equity stake was sold for €300mn, implying a 30 per cent discount to its most recent valuation.

In the letter to shareholders, Grossnigg noted that new money was particularly needed to try to complete some projects, which in total could be worth billions less than anticipated if they are sold as construction sites.

He also warned that banks had first claim on many individual assets of Signa Prime and Signa Development because of direct mortgages against the properties themselves, meaning that a fire sale could completely wipe out value for lenders and shareholders lower down the chain.

Investors in Signa have been coming to terms with the bewildering complexity of the company since its collapse late last year. The accounts of the Signa Group were never consolidated, and thanks to the way Benko ran the business — shifting around assets, cash and debts — some investors have been left unaware of what assets they have a claim on.

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