BayWa restructuring: Investors in hybrid bonds have to accept massive losses

Munich. In order to restructure the agricultural group BayWa, the subscribers of a 100 million euro hybrid bond now also have to absorb losses.

According to the new restructuring agreement, they will only receive two percent of their capital back and will have to forego the interest entirely, as BayWa announced in Munich on Wednesday.

The bond issued three years ago was actually supposed to have an interest rate of 7.75 percent. The second attempt at financial restructuring of BayWa is now on the home stretch. 267 of the 268 creditors have already agreed in principle to the waiver of around 1.5 billion euros provided for in the restructuring plan; the agreement with the last partner is considered a formality.

Now much less can be expected. That's why the package with the banks and major shareholders had to be tightened up again: The banks are making concessions on the loans and extending their term until 2030. The agricultural retailer, which narrowly avoided bankruptcy two years ago, has until the end of 2030 - two years longer than before - to get back on its feet financially.

BayWa had already outlined the basic principles of the concept at the end of June. The two major shareholders, the Bayerische Raiffeisen-Beteiligungs-AG and the Austrian Raiffeisen Agrar Invest, are handing over their shares totaling 67.1 percent to a trustee.

They will only get it back if they together add at least 220 million euros in equity during a capital increase in 2029. In return, the banks subordinated 700 million euros. The creditors will only get another 900 million back if the sale of BayWa r.e. brings in this amount.

The subsidiary, which contributed significantly to the difficulties due to its high capital requirements, is currently owned 51 percent by BayWa AG and 49 percent by the Swiss investor Energy Infrastructure Partner (EIP). Both shares are now to be transferred to a restructuring partner who will organize the sale of the company. With this step, BayWa will get the subsidiary off its balance sheet. BayWa r.e. The AG and EIP were in debt for a total of 1.3 billion euros. The two partners are waiving the repayment, but they should still share in the proceeds of a later sale.

BayWa explained that the restructuring expert supported the new concept. This would enable BayWa AG to be restructured. The restructuring agreement itself should be finalized by the end of the year. The board of directors and supervisory board, the banks and the major shareholders must then give the green light again.