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BayWa Plans Capital Increase, Asset Sales as Part of Revamp

stock :: 2024-12-01 :: source - bloomberg

By Arno Schütze

(Bloomberg) -- BayWa AG plans to conduct a rights issue and sell off assets in a bid to overcome a cash squeeze debilitating the German conglomerate.

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The capital increase, to be carried out next year, and the sale of “certain key, particularly international, affiliated companies” are among measures the management board hopes will help it reach an agreement with creditors and other stakeholders, Munich-based BayWa said in a statement on Saturday.

The recapitalization should be completed by the start of the second quarter 2025, while the organizational overhaul is expected to take until the end of 2027, it said.

By that time, “the equity ratio will have improved substantially and the company will generate normal earnings,” it said, citing an updated draft restructuring report.

BayWa, which is focusing on four, core business areas of Agri Trade and Service, Construction, Energy and Agricultural Equipment, is trying to persuade creditors and stakeholders of the feasibility of its restructuring plans since experiencing a cash squeeze earlier this year. Ballooning financing costs and problems at its renewable energy projects business have left it teetering after the company borrowed more than €5 billion ($5.29 billion) to fund an acquisition spree.

Chief Executive Officer Marcus Pöllinger left at the end of October and finance chief Andreas Helber is stepping down in March. German financial regulator BaFin ordered an audit of its 2023 accounts earlier in November, saying the company’s presentation of its financial position and associated risks may be incorrect.

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