A traditional company is in trouble: Baywa’s debts are so high that the board of directors has commissioned a restructuring report.
The Baywa Group, which is in debt running into billions, has brought a restructuring expert on board. The report is intended to improve the “tense financing situation”, as the Munich-based agricultural trading and energy company with around 24,000 employees announced on Friday evening. At the same time, the management board expressed its optimism that thanks to “constructive discussions with the financing partners” and the measures introduced, the financial situation can be strengthened in the long term. One problem is the rise in loan interest rates, which makes financing the billion-euro loans immensely more expensive, as can be seen from the company’s annual reports.
Red numbers
The company did not initially disclose who the expert is or when the restructuring report should be available. The company, which emerged from the cooperative movement, celebrated its 100th birthday in 2023 and ended the anniversary year with a net loss of 93 million euros. In the first quarter, Baywa slipped even deeper into the red with a loss of 108 million euros. At the end of March, Baywa was burdened with long- and short-term debts amounting to almost 5.6 billion euros. At the Annual General Meeting in June, CEO Marcus Pöllinger announced socially acceptable job cuts and sales of non-essential business areas.
Expansion on credit
These debts are largely due to the term of office of Pöllinger’s predecessor Klaus Josef Lutz, who headed the company, which was previously limited to agricultural trading, until spring 2023 and transformed it into a conglomerate. The manager expanded virtually around the globe on credit and, above all, built up the renewable energy business as the group’s second pillar.
But Baywa also made purchases in the agricultural trade during Lutz’s tenure: the company became the majority shareholder of the large New Zealand apple grower Turners and Growers, which operates its plantations worldwide. This means that many German consumers who are not familiar with the company also have Baywa fruit in their hands. These include, for example, apples of the “Kanzi” and “Jazz” varieties.
Source: Stern
