Baywa has been in a state of emergency for almost a year. In the early summer of 2024, the highly indebted agricultural trading group slipped into an existential crisis – through its own mistakes. The restructuring measures introduced by the board of management at the time proved to be insufficient to turn the long established Munich-based company around. The Volks- und Raiffeisenbanken of Bavaria, as the main owners and the creditor banks, were forced to stabilise Baywa with financial injections of over 1 billion euros to date in order to avert the threat of insolvency.

Without the aid guarantees from the cooperative primary institutions of the Free State of Bavaria, the listed company, which also belonged to the cooperative sector, would have gone bankrupt long ago. The calculation was clear: the reputational damage and financial loss for the cooperative financial sector would have been significantly higher if Baywa had been left out in the cold. A mountain of debt amounting to 5.5 billion euros forced the creditor institutions to take stringent rescue measures. Otherwise, they would have had to write off their claims against Baywa completely.

Since then it has been clear: Baywa will be broken up. According to the restructuring plan from consultants Roland Berger, group turnover will be reduced by half to 12 billion euros. Across Germany, 1,300 of the approximately 8,000 full-time jobs will be cut, and locations closed. The sale of non-core activities should help to reduce financial liabilities by around 4 billion euros.

While Baywa has already completed the sale of its stake in RWA Raiffeisen Ware Austria, and initiated the sale of the Dutch grain trader Cefetra, still on the to-sell list are New Zealand orchard operator Turners & Growers, and the wind power and solar plant project operator Baywa r.e. The disposal of Baywa r.e. is proving to be a particularly difficult undertaking. This is because the largest loss-maker for the group is constrained by its own restructuring plan. At over 2.1 billion euros, Baywa r.e. recently accounted for two-fifths of the group's financial debt. This complicates the plan to complete the restructuring by the end of 2028. According to Roland Berger's plans, the shrunken Baywa should then reach the profit zone.

The complexity of the reorganisation shows how rocky the road ahead is. In addition, the number of creditors is very high at around 300. Against this backdrop, the decision at the turn of the year to handle the restructuring within the framework of the German Corporate Stabilisation and Restructuring Act (StaRUG) was understandable. As a result, a minority of creditors who did not want to participate in the restructuring were forced to do so by the courts. Without the StaRUG procedure, Baywa might have gone bust anyway. Now the rescue process is legally underpinned.

Meanwhile, a reform of Baywa's corporate governance is also proving to be tough. While the positions of Chairman of the Board of Management, Chief Financial Officer and Chairman of the Supervisory Board have long since been filled, some old representatives of the two major cooperative shareholders still sit on the supervisory body, even though they also share responsibility for the company's disaster. Bayerische Raiffeisen-Beteiligungs-AG holds 33.8% of the share capital, Raiffeisen Agrar Invest from Austria 28.3%. So far, only Wolfgang Altmüller, CEO of Meine VR Bank in Rosenheim, has faced the consequences and resigned from his position.

The problem is that the old representatives were only re-elected to the board last year with a term until 2028. Then, at the latest, can the Supervisory Board be restructured.