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The agricultural trader Baywa is in financial difficulties. © David-Wolfgang Ebener/dpa
Baywa, Germany’s largest agricultural trader, is in crisis and is receiving a financial injection of over 500 million euros. But this does not pay off its debts.
Frankfurt – BayWa can breathe a sigh of relief – but the question is how long: The core banks are granting Germany’s largest agricultural trader a bridging loan of 272 million euros, while the Bavarian Raiffeisen Beteiligungs-AG (BRB) and the Austrian Raiffeisen Agrar Invest (RAIG) are providing subordinated loans of 125 million euros. In addition, the BRB will sell its share in BRB Holding for 120 million euros, which will provide additional liquidity, as the Handelsblatt reported. The company is expected to receive more than half a billion euros in the next few days.
Banks and owners rush to help: will insolvency otherwise be a threat?
This round of financing gives Baywa a breathing space in its fight against insolvency, but the company’s long-term stability remains questionable. The credits and loans are initially only valid until the end of September, which underlines the urgency with which the company must find a sustainable solution.
Baywa’s board of directors, headed by Marcus Pöllinger, has announced that it will present a restructuring plan by the end of September. The company has commissioned the management consultancy Roland Berger to prepare a restructuring report, as the South German Times reported. This report will be crucial for determining what happens next with Baywa. Previous indications seem to suggest that a comprehensive restructuring and possibly the sale of company shares may be necessary.
Debts amounting to 5.5 billion euros
Baywa, which has around 24,000 employees and is active in 50 countries, is apparently suffering from a mountain of debt of around 5.5 billion euros. This debt burden is further burdened by rising interest rates. In the first quarter of this year, the company already paid 97 million euros in interest on loans, according to the Handelsblatt.
The high level of debt results from investments in areas such as renewable energy and international projects, which are now proving to be a financial burden
Outlook remains uncertain: What will happen next with Baywa?
Baywa’s long-term future is uncertain. The previous CEO Klaus Josef Lutz, who was replaced by Marcus Pöllinger in 2023, recently criticized his successor and the current management: “The current CEO may not be the right board member for the current challenges.”
However, Lutz denied any responsibility for the current crisisThe major shareholder BRB, which consists mainly of Bavarian cooperative banks, is also affected by the situation, as the cooperatives are suffering greatly from the crisis, as the South German Times reported.
A possible sale of company shares and restructuring are therefore seen as likely measures. While the short-term financial aid averts insolvency, it remains to be seen how the situation will develop. The exact details and the final restructuring plan will only become clear in the coming weeks.
