These are challenging times for Marcus Pöllinger. The existential crisis at the agricultural trading group Baywa is also a professional crisis for the CEO. When he presents the figures for the second quarter on 27 September, the Munich based SDax constituent company is likely to be in the red again. It would be the company's fourth consecutive quarterly loss.

High interest expenses due to a debt mountain totalling over 5 billion euros, and potentially more writedowns in the solar and wind farm project segment, are putting pressure on the group. This is eating away at the capital base, and draining the liquidity of the company, whose major shareholders are from cooperative banking sector.

Pöllinger's room for manoeuvre and decision-making is limited, as the latest rescue package from the cooperative banking sector anchor shareholders, and the creditor banks, means that the latter, in particular, have the say at Baywa. The 550 million euro bridging loan solution, which averted the threat of insolvency, expires at the end of September.

By then, the basic framework of a debt restructuring aimed at a solid capital structure on the liabilities side of the balance sheet, the cornerstones of a targeted structural reorganisation of the group's activities, must be in place. Baywa will probably have to give up or sell a large part of its non-core activities.

This is not only a turning point for Baywa but also for its CEO, who will be 46 years old on 6 November. These are fateful days for him. In July, he had to finally bury his hopes that Baywa would be able to overcome its self-inflicted difficulties on its own, with the help of the restructuring programme announced at the end of March. On 12 July, the CEO declared the group a restructuring case in an ad hoc announcement. This came as a shock to investors. The Baywa share price has since fallen sharply, and shareholders' mistrust and disappointment remains deep-seated.

At the end of the same month, Pöllinger cancelled its annual forecast for operating results, and postponed the publication of the half-year report by nine weeks. A restructuring report, including a going concern forecast, is now eagerly awaited in mid-September, from the consultants commissioned by Roland Berger. A reorganisation coordinator from Alix Partners is sitting at the table with the Management Board. This shows that the creditor banks, led by DZ Bank, LBBW and HypoVereinsbank, are now keeping Baywa on a tight leash, in order to be informed of developments on a daily basis.

This is equivalent to demoting the CEO. Pöllinger's chair is wobbling in the midst of the conflict. A reorganisation of the Management Board and Supervisory Board is expected anyway following the debacle. The CEO, who has been at the helm of the Group since April last year, bears a decisive share of responsibility for the disaster, by virtue of his prominent role in management decisions. He supported the expensive expansion programme of his predecessor, Klaus Josef Lutz. The business administration graduate has been a member of the top management body since November 2018. He has worked for the company for 16 years. Before his promotion to the Management Board, Pöllinger headed up the group's Building Materials Division, which was revitalised under his direction.

Pöllinger is keeping a low profile in the public debate, particularly loud in Munich, about who is to blame for all the misery. That is his way, as he is in any case not regarded as a great communicator. In this particular case, he is better off exercising this restraint than deliberately stepping into the limelight to justify his actions.

The CEO was well-advised not to get involved in another mud fight with Lutz. The latter tried to explain things as he saw them by campaigning on his own behalf. Although this gave him temporary public influence over the interpretation of events, it was not for the benefit of Baywa, but solely for his own benefit.

This behaviour gives the impression that Lutz is fighting for his reputation among the business elite and in high-ranking social circles in the Bavarian capital. After all, the 66-year-old has been President of the Munich and Upper Bavaria Chamber of Industry and Commerce since 2021. His voice carries weight in the Free State's business community. Baywa's existential crisis, which has its roots in his era as CEO (2008 to March 2023), does not sit well with the lawyer's image.

The two executives already have a problematic relationship. In January, Baywa caused a stir with a power struggle. Lutz, who seamlessly moved to the Supervisory Board after the handover, and took over as Chairman, wanted to dismiss Pöllinger. This was the culmination of a rift which developed even though Lutz had been happy to groom his so called „foster son“ as his successor.

Lutz justified his actions by claiming that Pöllinger had violated compliance rules. According to media reports, the case concerned confidential personnel files of board members that a group manager had created. An external consultant allegedly saw these documents. However, the other members of the Supervisory Board were not prepared to support Lutz. At a specially called meeting, the Supervisory Board expressed its confidence in the CEO. No misconduct was recognisable, it was stated. As a result, Lutz threw in the towel after just eight months. He left Baywa with a bang; since May, fellow banker Gregor Scheller (66) has been helping to turn the company around as the new Supervisory Board Chairman. Pöllinger emerged stronger from the conflict with Lutz. Shortly afterwards, however, the company's crisis escalated dramatically.