Renovation concept
Baywa agrees rescue plan – first big steps
In the summer, Germany’s leading agricultural trader came to the brink of insolvency. The price of salvation is shrinkage.
The heavily indebted Munich conglomerate Baywa is about to take the first steps towards the hoped-for financial recovery: The company has agreed with the most important creditor banks and the two main shareholders on the roadmap for restructuring by 2027.
Baywa published a mandatory stock exchange announcement that night. The restructuring agreement should be legally binding by the end of April 2025 at the latest, including a restructuring of the financing. The company is burdened with billions in debt, the legacy of rapid expansion on credit.
Capital increase of over 150 million euros
Baywa, which emerged from the cooperative movement, is the largest German agricultural trader. The group plays an important role in agriculture and food supply in the south and east of Germany. The 101-year-old company also operates as a service provider and dealer in the construction and energy sectors.
One component of the restructuring concept is the issue of new shares. The cash capital increase with subscription rights for existing Baywa shareholders is expected to bring the company 150 million euros. The details are expected to be finalized in the first quarter of the new year.
Large shareholding in Austria is sold
The expected downsizing of Baywa also begins: By the end of March, the company wants to sell its almost 48 percent stake in Raiffeisen Ware Austria (RWA), the Austrian counterpart of Baywa, for 176 million euros. So far, the companies have been cross-involved in a nested structure.
The Baywa share in RWA is now to return to Austria and be taken over by an asset management affiliate of the RWA Group. The associated contract has already been signed, but antitrust approval is still pending.
Job cuts and sales
At the beginning of December, Baywa announced job cuts on a larger scale: 1,300 of the 8,000 full-time jobs at the parent company Baywa AG are to be cut, which corresponds to 16 percent of the group’s full-time jobs in Germany. Baywa, which is represented in 60 countries, employs over 23,000 people worldwide.
The foreign workforce will also shrink due to the announced sales of parts of the company. At the beginning of December, Baywa also announced that it wanted to sell significant holdings.
In addition to RWA, the most important investments are Baywa re, which specializes in the planning and construction of green electricity power plants, the New Zealand apple producer Turners & Growers and the Dutch agricultural trading company Cefetra. However, Baywa did not provide any information about the future of these three investments at the weekend.
Group has taken over
Baywa only built up or bought the green electricity business and the investments in Cefetra and T&G over the course of the last decade. The debt from this debt-financed expansion has become a millstone for the company.
A syndicated loan with a limit of up to two billion euros would have been due in September 2025. Apart from that, the rapid increase in loan interest rates since 2022, which management did not expect, led to a tripling of the annual interest payments due. In the first nine months of 2024, Baywa posted a net loss of almost 641 million euros.
New financing contracts for the period until the hoped-for financial recovery in 2027 should be concluded by the end of April at the latest. According to Baywa, “almost all of the approximately 300 financial creditors” support the restructuring efforts, as the company announced in a supplementary press release on Saturday.
dpa
Source: Stern
