MUNICH (dpa-AFX) - The Baywa Group, which is billions in debt, has brought a restructuring expert on board. The expert opinion is intended to improve the "tense financial situation", as the Munich-based agricultural trading and energy company announced on Friday evening after the close of trading. At the same time, the Executive Board expressed its optimism that it would be able to sustainably strengthen the financial situation thanks to "constructive talks with the financing partners" and the measures introduced. One major problem is the sharp rise in interest payments on loans since 2021. The share price slumped on Monday.

In early trading, the share, which is listed on the small-cap index SDax, slipped by around a third. It had already lost a significant amount of value in recent months: since the beginning of the year, it had already fallen by more than a quarter before the weekend, which has now increased to more than half.

At the Annual General Meeting four weeks ago, CEO Marcus Pollinger said that he wanted to emerge from the crisis by cutting costs and selling unprofitable businesses. Among other things, the Management Board wants to sell the solar trade. This was already planned for 2023, but the Management Board was unable to find a buyer willing to pay the required price. The digital technology business for farmers has already been sold.

CEO Pollinger also wants to cut jobs, although he has not yet specified the size of the reduction. In the Construction division, the management is considering short-time working. Baywa currently has a good 24,000 employees.

The manager promised shareholders a "transformation process" after the loss-making year 2023 and a significantly better result in the current year. "Each unit must be profitable in the future," Pollinger said. However, he also indicated that no turnaround for the better is to be expected by the middle of the year: "Accordingly, the first half of the year cannot yet stand for the desired upturn".

There was sharp criticism of the company's development from shareholders, both from associations and individual shareholders. However, they approved Baywa's proposal not to pay a dividend for 2023.

In February 2023, Baywa celebrated its 100th birthday with a grand gala - and ended the anniversary year with a net loss of €93 million. In the first quarter of the current year, Baywa slipped even deeper into the red with a loss of €108 million.

Although the first three months are traditionally weak at Baywa, there had been no losses at the beginning of the year in previous years. Now, long-term and short-term debts of almost 5.6 billion euros are weighing on the company.

Most of this debt dates back to the tenure of long-time CEO Klaus Josef Lutz, who managed the group, which was previously limited to agricultural trade, until spring 2023. The manager expanded virtually around the globe on credit. Above all, Lutz built up the renewable energy business as a second pillar of the Group and also made acquisitions in agricultural trade.

After his departure as Baywa CEO in 2023, Lutz moved directly to the chair of the Supervisory Board. However, he resigned from the post at the beginning of this year following internal disputes. However, his successor at the top of the Group is not a Baywa novice who would have merely inherited the problems: Pollinger has been a member of the Board of Management since the end of 2018.

Unfortunately for Baywa, the increase in debt went hand in hand with the rapid rise in interest rates on loans since 2022. The interest burden was the main cause of the losses, as Baywa was in the black in its operating business.

However, the oppressive interest burden is not the only problem: a considerable part of the debt is bundled in a syndicated loan with a framework of up to 2 billion euros, of which Baywa had drawn down 1.4 billion at the end of 2023, as can be read in the 2023 annual report. The clock is ticking: The syndicated loan expires in September 2025.

The company did not initially disclose who the appointed expert is and by when the restructuring report should be available./he/cho/lew/men/mis