(Bloomberg) -- BayWa AG expects to receive fresh short-term funds as the struggling firm seeks more time to overhaul its crushing debt load.
The German commodities conglomerate is closing in on a deal that would increase an existing loan by €500 million ($558 million) and extend a standstill agreement until the end of the year, according to a statement Sunday. The “main lending banks” are expected to sign the required paperwork “in the upcoming days,” the Munich-based firm said in the release.
BayWa, whose businesses span agriculture, renewable energy and construction, is seeking to renegotiate its debt after experiencing a cash squeeze. The firm previously borrowed more than €5 billion to fund an acquisition spree, but it was pushed into difficulties by higher financing costs and issues at its renewable energy projects business.
Shares in the company rose as much as 10.9% on Monday. They’re still down more than 50% this year to date.
BayWa’s lenders include Deutsche Bank AG, Commerzbank AG and UniCredit SpA, according to data compiled by Bloomberg. It’s not clear how much each bank is exposed to BayWa. Representatives for the lenders declined to comment.
The agreement will “create the basis for a subsequent long-term financing solution until the end of 2027,” according to BayWa’s statement on Sunday. “The key points of the long-term restructuring solution are still being negotiated between BayWa AG, the lending banks and other key stakeholders.”
The company reported impairment losses of over €222 million on Friday, with a large part stemming from writedowns on its wind and solar plants.
BayWa faced particular pressure on its liquidity in June, before commissioning a restructuring report the following month, according to first-half results published on Friday. As well as addressing a €500 million bond maturity, the company also repaid €120 million on its commercial paper program in the last two weeks of June, out of a total €218 million across the second quarter.
BayWa reported €5.4 billion in long- and short-term debt as of June 30. As well as promissory notes and bilateral financing, the company also has a total €2 billion syndicated loan facility. BayWa does not disclose the breakdown of individual bank exposures.
--With assistance from Arno Schütze and Sonia Sirletti.
(Updates with details throughout and some lenders’ names in fifth paragraph.)
©2024 Bloomberg L.P.
