Not all of its lenders have approved the company’s proposed transformation, as it seeks to offload a large portion of its debt
German multinational BayWa has been forced to take legal action in order to ensure its extensive restructuring of the business can proceed as planned.
In a statement, it said it had reached agreement with the “vast majority” of its financing partners on the proposed changes.
BayWa is seeking to avoid corporate collapse under the weight of hefty debt obligations that can no longer be met due to falling profitability in parts of its business.
In early December, the group revealed plans to transform the group by late 2027, with the likely sale of many of its foreign investments, as well as loss of up to 1,300 out of around 8,000 full-time jobs.
Reports also suggested it plans to sell off T&G Global, the New Zealand business at the heart of its Global Produce division.
However, a very small number – reckoned to be 5 per cent – of its lenders have refused to give their consent to the plans.
“As repayment to these individual creditors is out of the question, despite sufficient available liquidity, for reasons of equal treatment of all financial creditors BayWa AG has today initiated restructuring proceedings at the Munich Local Court in accordance with the German Act on the Stabilisation and Restructuring Framework for Companies,” it revealed.
Under the terms of that legislation, BayWa would only require consent from 75 per cent of its financial creditors.
It added that a planned capital increase of around €150mn would strengthen its equity base.
CRO and board member Michael Baur commented: “The long-term transformation concept for BayWa is in place: we have a detailed operational programme of measures and a resilient financing concept that will be further strengthened by the capital increase secured by the main shareholders. The operational transformation is already actively being implemented.”
He added: “The [legal] proceedings that have now been initiated are aimed at a few individual creditors who have not consented to the financing concept. It is a necessary final step to secure the restructuring framework until the end of 2027.”
Due to those proceedings, the publication of BayWa’s annual and consolidated financial statements for 2024 (previously scheduled for 27 March 2025) is expected to be delayed, and it may also be necessary to postpone the company’s 27 May AGM.
