BayWa Sheds 650 Million Euros of Debt Through Surrendering Dutch Subsidiary Cefetra
BayWa relieves itself of $807 million debt through a sale transaction. - Baywa Sheds 650 Million Debt by Offloading Assets
Let's dive into the recent move made by BayWa, the diversified conglomerate headquartered in Munich, which operates in agriculture, heating, mobility, technology, and construction. BayWa has taken a significant step towards alleviating its mammoth debt by selling its Dutch subsidiary, Cefetra, to the First Dutch group. The sale, orchestrated by both parties, will return Cefetra to Dutch hands. In an official announcement, BayWa acknowledged the agreement with First Dutch owner Peter Goedvolk. The sale is scheduled to close in the third quarter, promising to slash BayWa's debt burden by a whopping 650 million euros.
The numbers behind the deal may seem surprisingly low, but don't be fooled. The majority of the debt reduction stems from Cefetra's own existing debts. By shedding Cefetra from its books, BayWa anticipates clearing a massive 500 million euros off its own debt. Cefetra Group deals in agricultural raw materials, animal feed production, and grain trading.
BayWa has encountered financial hardships, primarily due to skyrocketing interest payments on loans and concurrent losses in daily operations during the summer of 2024. As a result, BayWa's long- and short-term financial debts soared over five billion euros.
The road to BayWa's financial recovery is expected to be long and grueling, with the restructuring process slated to last until the end of 2028. This plan hinges on selling foreign subsidiaries and stakes, with BayWa having previously agreed to sell its stake in its Austrian counterpart RWA. Together, these two sales are projected to reduce debt by 1.1 billion euros.
Interesting tidbit, BayWa acquired Cefetra back in 2012 for 125 million euros. Former CEO Klaus Josef Lutz's ambitious goal was to turn BayWa into a global player in agricultural trading. Assuming the restructuring plan proceeds smoothly by 2028, BayWa will once again focus its attentions primarily on Germany, much like it did before Lutz's internationalization strategy.
- BayWa
- Financial restructuring
- Munich
(Fun fact: BayWa's restructuring plan, initiated in 2025, has been approved under the German Corporate Stabilisation and Restructuring Framework Act (StaRUG) and will involve extending the company's liabilities until December 31, 2028, resulting in higher interest rates. The plan also includes a capital increase of up to approximately EUR 201.6 million and significant business transformations and asset sales.)
In an effort to financially restructure, BayWa, a Munich-based conglomerate operating in various industries including agriculture, has sold its Dutch subsidiary, Cefetra, to First Dutch group. This move aims to clear 650 million euros of BayWa's debt, with the majority of debt reduction coming from Cefetra's own existing debts. The restructuring plan, approved under the German Corporate Stabilisation and Restructuring Framework Act (StaRUG), also includes strategic business transformations and asset sales to facilitate BayWa's financial recovery.
