MUNICH (dpa-AFX) - The Baywa Group, which is billions in debt, has brought a restructuring expert on board. The expert opinion is intended to improve the "tense financial situation", as the Munich-based agricultural trading and energy group announced. At the same time, the Board of Management expressed its optimism that it would be able to sustainably strengthen the financial situation thanks to "constructive discussions with the financing partners" and the measures introduced. One major problem is the sharp rise in interest payments on the loans since 2021, as can be seen from the annual reports.

Details of the restructuring program unclear

Baywa CEO Marcus Pollinger and his colleagues on the Board of Management published the mandatory announcement on Friday evening after the close of business. The company did not initially announce on Saturday who the expert is and by when the restructuring report should be available. In after-hours trading on the Tradegate platform on Friday evening, Baywa's share price plummeted by around 20 percent.

Red figures

In February 2023, Baywa celebrated its 100th birthday with a grand gala - and ended the anniversary year with a net loss of 93 million euros. In the first quarter, Baywa slipped even deeper into the red with a loss of €108 million.

At the end of the first quarter, non-current and current liabilities totaling almost 5.6 billion euros weighed Baywa down. Pollinger had already announced socially responsible job cuts and the sale of non-essential business areas at the Annual General Meeting in June. Baywa currently has a good 24,000 employees.

Expansion on credit

These debts are largely due to the tenure of long-time CEO Klaus Josef Lutz, who managed the group, which was previously limited to agricultural trade, until spring 2023. The manager expanded virtually around the globe on credit. Lutz primarily built up the renewable energy business as a second pillar of the Group.

However, Baywa also made acquisitions in agricultural trade during Lutz's tenure: Baywa became the majority owner of the large New Zealand apple grower Turners and Growers, which operates its plantations all over the world. Many German consumers who are not familiar with the company also have Baywa fruit in their hands, including apples of the "Kanzi" and "Jazz" varieties.

However, the current boss Pollinger is not a Baywa novice who merely inherited the problems: he has been a member of the Board of Management since the end of 2018. Unfortunately for Baywa, the increase in debt went hand in hand with the rapid rise in interest rates on loans since 2022, a development that has also caused difficulties for other companies.

The Board of Management had obviously calculated with long-term low interest rates and was pleasantly surprised. In 2021, Baywa paid just under 122 million euros in interest on loans, in 2022 it was 202 million, and in 2023 the interest burden shot up to 362 million euros. This was the main cause of the losses, as Baywa was in the black in its operating business.

Billion-euro loan matures in 2025

However, the oppressive interest burden is not the only problem: a considerable part of the debt is bundled in a syndicated loan with a framework of up to 2 billion euros, of which Baywa had drawn down 1.4 billion at the end of 2023, as can be read in the 2023 annual report. The clock is ticking: The syndicated loan expires in September 2025.

The development is also very unpleasant for former CEO Lutz. He had moved directly to the chair of the Supervisory Board in 2023, but resigned at the beginning of this year following internal disputes. However, he has not disappeared from the limelight: As President of the Bavarian Chamber of Industry and Commerce, Lutz is one of the most prominent representatives of the local economy./cho/DP/he