BAYWA AG 
The share, which is listed on the small-cap index SDax, fell by a third on Monday to 14.90 euros, its lowest level for more than 15 years. Two years ago, the share price was three times as high. As was announced on Monday, the highly indebted company - apparently under pressure from creditor banks - has commissioned a restructuring report to show whether BayWa is capable of being restructured. The company speaks of a "strained financing situation". The aim of the expert opinion is a positive going concern forecast, which is the prerequisite for an extension of loans. The agricultural trader has also brought a restructuring consultant on board who, according to an insider, is based below the Board of Management.
"This makes it clear that the situation at BayWa is much more critical than previously assumed," wrote the German Association for the Protection of Securities (DSW) on Monday. "The high level of debt is a very serious problem."
BayWa CEO Markus Pöllinger is currently trying to correct the debt-financed expansion course pursued by his predecessor Klaus Maria Lutz. The Group was sitting on €5.5 billion in debt at the end of 2023. With rising interest rates, this is increasingly becoming a burden. The higher interest charges already pushed BayWa into the red for the first time last year, as solar trading was not running at the same time.
Pöllinger had already announced a consolidation course and canceled the dividend for 2023. Now the situation has apparently worsened. "Based on constructive discussions with financing partners and the measures initiated, the Management Board assumes that the financial situation can be sustainably strengthened," the Management Board tried to reassure investors on Friday evening.
BayWa's largest creditors are DZ Bank - which also belongs to the cooperative sector - Landesbank Baden-Württemberg (LBBW) and UniCredit, which had put together a two billion euro syndicated loan that matures in September 2025. It is not known whether the loan is subject to covenants that would entitle the banks to terminate the loan prematurely in the event of non-compliance. In April, BayWa called off the issue of a 250 million euro bond due to a lack of demand, although it had offered 6.75 percent interest. Investors were also hesitant at the time because the Group did not have a credit rating. At the end of June, BayWa repaid a €500 million green bond as planned.
WHEN WILL SOLAR TRADING BE SOLD?
The planned sale of the trading business with solar panels and inverters could bring fresh money into the coffers and alleviate the worst financial worries. However, nothing has come of it so far because the industry is under pressure due to massive overcapacity in solar modules and a dumping strategy by Chinese competitors. According to BayWa's own estimates, the originally hoped-for sales proceeds of 2.2 to 2.4 billion euros will have to be significantly reduced if it wants to sell the business. Solar trading is part of the renewable energy subsidiary BayWa r.e., which was set up by Lutz and in which the former Credit Suisse subsidiary EIP acquired a 49% stake for a good half a billion euros in 2021. Although its wind and solar projects are lucrative, they also tie up a lot of capital.
The Vice President of DSW, Munich-based lawyer Daniela Bergdolt, is particularly concerned about investors from the agricultural sector. "BayWa is a special company: "Many farmers are both customers and shareholders. The BayWa share is often an important part of their retirement provision." The largest shareholder is Bayerische Raiffeisen-Beteiligungs-AG with 33.8%, which is backed by the state's cooperative banks. The Chairman of the Supervisory Board is Gregor Scheller, the outgoing Chairman of the Bavarian Cooperative Association. The Austrian company Raiffeisen-Agrar Invest holds 28.1 percent of the shares.
(Report by Alexander Hübner. Edited by Olaf Brenner. If you have any queries, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)
