The heavily indebted BayWa Group has hired a restructuring auditor to improve its strained financial situation. The Munich-based agribusiness and energy group announced this on Friday evening. The management is confident that constructive discussions with financing partners and the measures already initiated can sustainably strengthen the financial situation. A significant problem is the sharply increased interest payments on loans since 2021.
BayWa CEO Marcus Pöllinger and his board colleagues announced the mandatory notification after the stock market closed. The identity of the auditor and the deadline for the restructuring report were not initially disclosed. In after-hours trading on the Tradegate platform, BayWa's shares temporarily fell by 19.10 percent to 18.00 euros.
In February 2023, BayWa had celebrated its 100th anniversary and ended the jubilee year with a net loss of 93 million euros. In the first quarter of 2024, BayWa slipped further into the red with a deficit of 108 million euros. Long-term and short-term debts amounting to nearly 5.6 billion euros weighed on the company at the end of the first quarter.
Already at the general meeting in June, Pöllinger had announced socially responsible job cuts and the sale of non-essential business areas. BayWa currently employs around 24,000 people.
The debts are largely attributed to the tenure of long-time CEO Klaus Josef Lutz, who led the company until the spring of 2023. Lutz expanded globally on credit and particularly developed the renewable energy business. BayWa also made acquisitions in agricultural trade, for example, becoming the majority owner of the New Zealand apple grower Turners and Growers.
The current head, Pöllinger, who has been part of the board since the end of 2018, inherited the debt but also had to manage the rapid increase in borrowing costs since 2022. In 2021, BayWa paid nearly 122 million euros in interest, in 2022 it was 202 million, and in 2023 the interest burden rose to 362 million euros. This was the primary cause of the losses, since the operating business was profitable.
A significant portion of the debt is bundled in a syndicated loan with a framework of up to 2 billion euros. By the end of 2023, BayWa had utilized 1.4 billion of this amount. This syndicated loan expires in September 2025, which adds additional pressure on the company's management.
The development is also unpleasant for the former CEO Lutz. He moved to the supervisory board in 2023 but resigned from this position at the beginning of this year after internal disputes. Nevertheless, he remains a prominent figure in the local economy as the president of the Bavarian Chamber of Industry and Commerce.
