The Bavarian agro-trading group BayWa, which has run into increasing difficulties in recent months, is receiving help from the Bavarian cooperative banks to overcome the crisis. This and calming reports about the second quarter helped to stem the rapid fall in the share price and restore confidence this week.
BayWa, which is active in raw materials trading, construction activities and energy and is active in the Netherlands through companies such as Cefetra and Abemec, has been on a seemingly unstoppable growth spurt in recent years. Turnover rose to €27 billion in 2022. In 2023, it fell back to €24 billion and things seemed to falter. In recent months there have been tensions and top executives have left the company. Something was wrong financially.
Choked up on energy
It was only in mid-July, at a shareholders' meeting, that it became apparent how serious the problems were. Especially in the renewable energy branch. BayWa had choked on solar panels, could not compete with cheap Chinese imports and saw losses rise rapidly. There were also setbacks on the (agro) raw materials market and in construction. It all piled up. The company now has a mountain of debt of €5,5 billion and business activities that need to be reorganized.
Because of all the bad news, the share price, which had fluctuated between €20 and €30 for a long time and which had previously been much higher, suddenly fell to just €10 this week.
Major shareholder GVB
This seemed like the moment for major shareholder Genossenschaftsverband Bayern, an umbrella organization of cooperative banks that owns 34% of BayWa shares (via holding company BRB), to step forward and calm things down. Outgoing GVB chairman Gregor Scheller, who has also been chairman of the supervisory board at BayWa since May, expressed support.
Remediators appointed
Shortly afterwards, the CFO of BayWa re (renewable energy) announced her departure and the news emerged that the Swiss EIP (Energy Infrastructure Partners) is increasing its interest in this business unit to 70 to 80 percent. Restructuring and reorganization experts have also been appointed at both BayWa itself and BayWa re.
Remarkably, BayWa has not yet presented heavily red figures. However, sharply declining (provisional) quarterly and half-yearly results. Even for the second quarter of this year, a reasonable profit was reported.
Half-year figures later
It should be noted that the presentation of the final half-year figures has been postponed until the end of September. There is a chance that different results will emerge, but at that time the rescue operation is already in full swing and peace has probably returned to some extent.