A second report on the likelihood of success of such an operation states that BayWa can only survive by "shrinking healthily."
The rescue plan includes the sale of various international subsidiaries, including stakes in the New Zealand fruit trader T&G Global and the Dutch grain and soybean trader Cefetra. Additionally, BayWa will need to adjust its functional structural lines and reduce operational and energy costs. The core activities in agriculture, building materials, energy, and technology will be retained, ‘but must operate functionally.’ What this concretely entails is not made clear.
A capital increase is planned, where existing shareholders will need to inject new funds. This money will be used to wind down loss-making subsidiaries. In September, German credit banks already made 500 million euros available as a bridging loan so that the company could complete the harvest season.
Despite the challenges, the restructuring report offers hope for a feasible rescue. Experts point out that the proposed measures can restore liquidity. It remains uncertain what the outcome will be of the investigation by the financial regulator Bafin. These investigations focus on possible irregularities in financial reporting, and a negative outcome could further damage confidence.
German politicians, such as Florian von Brunn (SPD), have repeatedly emphasized that a recovery plan can only succeed if full transparency about BayWa's financial situation is provided. If it turns out that the figures have been tampered with, this could lead to stricter regulations and have significant consequences for the company.
The largest shareholders, including Bayerische Raiffeisen-Beteiligungs AG and Raiffeisen Agrar Invest, are crucial to the recovery process. They are being called upon to finance most of the capital increase. It remains to be seen to what extent the German government is willing to step in.
Outgoing Chancellor Olaf Scholz (SPD) and Economy Minister Robert Habeck (Greens) recently presented a comprehensive recovery plan for the struggling German economy. Following the fall of their coalition with the FDP, the economic malaise now plays a role in the election campaigns. The problems in the automotive industry also require attention and possibly additional government support.
Although the road to recovery for BayWa remains long and uncertain, the current plan offers a clear structure and concrete measures to make the conglomerate financially sound again by the end of 2027. But that can only happen if shareholders, banks, and the government step in. Only then can BayWa remain a major player in German agriculture.