BayWa AG announces rights issue and asset sales to tackle cash crunch

BayWa AG, a German conglomerate, has unveiled a strategy to address its financial challenges, which includes a rights issue and the divestment of selected major assets, particularly those abroad.

The company aims to execute the capital raise by the onset of the second quarter of 2025, with the goal of concluding its organizational restructuring by the end of 2027.

The Munich-based firm anticipates that these actions will significantly enhance its equity ratio and restore normal profitability by the completion of the restructuring, according to an updated draft restructuring report mentioned in a statement released on Saturday.

BayWa is currently concentrating on its four principal business sectors: Agri Trade and Service, Construction, Energy, and Agricultural Equipment. The company has been working to convince creditors and other stakeholders of the viability of its restructuring plan following a cash shortfall earlier this year.

The liquidity crisis was exacerbated by soaring financing costs and difficulties within its renewable energy projects sector. BayWa had previously borrowed over €5 billion ($5.29 billion) to finance a series of acquisitions.

The financial strain has led to changes within BayWa’s leadership. Marcus Pöllinger, the Chief Executive Officer, departed at the end of October, and Andreas Helber, the finance chief, is scheduled to leave in March.

Furthermore, in November, BaFin, the German financial regulator, mandated an audit of BayWa’s 2023 accounts over concerns that the company may have inaccurately represented its financial position and the associated risks.

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