Rene Benko's real estate giant Signa -- whose vast portfolio includes New York's iconic Chrysler building -- on Wednesday announced it would initiate insolvency proceedings, marking the spectacular downfall of the self-made Austrian tycoon.
Benko -- one of Austria's richest men -- founded Signa in 2000 and has grown it into a property and retail conglomerate.
The company said it would file for court protection as it undergoes restructuring.
"Despite considerable efforts in recent weeks, the necessary liquidity for an out-of-court restructuring could not be sufficiently secured, so Signa Holding GmbH is applying for restructuring proceedings with self-administration," the company said in a statement.
Signa -- who owns Berlin shopping gallery KaDeWe -- said its retail investments "did not bring the expected success" with the sector under "severe economic pressure" in Europe.
It also cited a "negative impact on business development in the real estate sector in recent months".
As the sector is hit by higher borrowing costs and surging material prices, a growing number of developers are filing for bankruptcy.
Several Signa projects, including the construction of a landmark high-rise in the German city of Hamburg, have ground to a halt.
Signa said it would initiate insolvency proceedings at a Vienna court on Wednesday.
"The aim is the orderly continuation of operational business operations within the framework of self-administration and the sustainable restructuring of the company," it added.
The restructuring proceedings fall under insolvency proceedings in Austria.
Since 2000, Benko, 46, has aggressively grown Signa.
With offices in Austria, Germany, Italy, Luxembourg and Switzerland, Signa has holdings worth 27 billion euros ($29 billion) and projects worth 25 billion euros in development, according to its website.
At one point, the company reportedly tried to attract investors with slogans like "It was never so boring to get rich".
But the developments of recent weeks -- when the trouble the company is facing started to come to light -- have caused the estimated value of Benko's fortune be slashed from $6 billion to $2.8 billion, according to Forbes.
Earlier this month, Thailand's Central Group took control of another prestigious Signa asset, the historic British department store Selfridges.
The online e-commerce unit Signa Sports United has also initiated insolvency proceedings for several of its subsidiaries and has decided to drop its listing on the New York Stock Exchange to reduce costs.
Benko's undertakings have run into trouble in the past.
The leading German department store chain Galeria Karstadt Kaufhof, which Signa purchased in 2019, filed for bankruptcy in 2020 amid the coronavirus pandemic, and the chain decided to close 52 stores at the start of the year.
In 2012, Benko received a 12-month suspended jail sentence over an Italian tax case, after a court found him guilty of bribing Croatia's former prime minister Ivo Sanader with 150,000 euros to intervene with the Italian tax authorities.
Born to a middle-class family in Innsbruck, Benko worked with a friend renovating attics as a teenager before dropping out of school and founding Signa.
