Baywa is in a deep crisis. Recovery will probably take years.
The heavily indebted Baywa Group is facing a restructuring that will take several years. A quick recovery of the traditional Munich company is clearly not to be expected. This is clear from a Baywa stock exchange announcement. In the first draft of their recommendations, the experts from the Roland Berger management consultancy have come to the conclusion that Baywa “can be rehabilitated under certain conditions and its operational competitiveness and profitability can be restored in the medium term”. The prerequisite for the restructuring is therefore a restructuring that will take several years.
Savings package and downsizing
This includes “numerous operational savings measures” and the sale of individual business areas. CEO Marcus Pöllinger had already announced a socially acceptable reduction in jobs at the annual general meeting in June. The group employs a good 25,000 people worldwide, and its main business area is agricultural trade. The company did not disclose which parts of the company could or should be sold. According to “Handelsblatt”, Baywa would like to sell its majority share in the green electricity subsidiary Baywa re to the Swiss co-shareholder EIP. This has not been confirmed by the company.
According to the statement, the Board of Management assumes that the negotiations on the restructuring plan with the lending banks and other key parties can be successfully concluded. It is still uncertain whether there will be any personnel consequences in the Baywa Board of Management.
Debt mountain weighs
Baywa is suffering from a mountain of debt of more than five billion euros in long-term and short-term financial liabilities. At the same time, the weak global economy has hit all of the company’s business areas. Two weeks ago, the company appointed Michael Baur, a consultant specializing in restructuring companies in crisis, as its general representative.
Creditor banks and major shareholders supported the group in mid-August with a short-term financial injection of more than half a billion euros. The majority of the aid package consists of loans totaling almost 400 million euros. However, a longer-term program is necessary. Among other things, a syndicated loan with a framework of up to two billion euros expires in September 2025.
At any rate, the company’s announcement was followed by a jump in share prices on the Frankfurt Stock Exchange: Baywa shares rose by over 15 percent to EUR 12.70 by early afternoon. However, over the past twelve months, Baywa shares have lost a good 60 percent of their value.
Source: Stern
