The rescue package for Baywa is the first official evidence of the state of the agricultural trading group, which has fallen into self-inflicted difficulties. The financial situation of the Munich SDax member is catastrophic. It is quite possible that additional funds will have to be raised when the restructuring report is available by the end of September. Without the shareholder loans from the two anchor shareholders, and without the bridging aid from the creditor banks, Baywa would have long since had to file for insolvency due to inability to pay. The financial injection for the highly indebted and loss-making company helps to ensure that the Board of Management cannot be accused of delaying insolvency.

The price of the rescue is high for the traditional company in the co-operative sector. Because in return for the aid, Baywa is now facing the prospect of insolvency. However, the impending break-up of the conglomerate is not the main point of the conditions. A reduction of the group to its core activities is regarded as a foregone conclusion anyway. The three largest creditor banks, DZ Bank, LBBW and HVB, have the final say.

In fact, the decisive factor is that Baywa is even parting with silverware in order to avoid bankruptcy. For example, the group must sell its 12% stake in the largest single shareholder, Bayerische Raiffeisen Beteiligungs-AG (BRB), which is dominated by the Volksbanken and Raiffeisenbanken, to the primary banks and DZ Bank at a price of 120 million euros as „collateral“. Cross-shareholdings are one of the characteristics of the co-operative „family“. BRB holds 33.8% of Baywa. With the compulsory relinquishment of its shares in BRB, Baywa will in future, be deprived of the opportunity to influence events in the cooperative association. This is equivalent to demoting the company within the „family“.

The case shows that the equity story of the company, which went public 22 years ago, has failed. A „fresh start“ on the trading floor remains highly questionable, because confidence on the capital markets has been destroyed. Delisting the company is, therefore, a serious alternative, so that Baywa can regain its composure. In addition, there must be personnel consequences in the Board of Management, and on the capital side of the Supervisory Board. Both bodies are responsible for the disaster. The debacle demonstrates that the profit-orientated interests of institutional investors are incompatible with the cooperative model in agriculture.