Up to 2,400 jobs are at risk at Baywa Re

23.12.2024

Source: E & M powernews

The ailing green energy group Baywa Re could switch to minority shareholder EIP. At the same time, job cuts are part of a three-year plan with the banks.

A nice present: Munich-based Baywa Re has bought itself a financial perspective with the banks until the end of 2027 with massive job cuts and a further focus on its core business and profitable markets. In addition, the bride is being made pretty in order to possibly sell her to the shareholder Energie Infrastructure Partners (EIP), a global infrastructure investor.

According to a statement from the renewable energy project developer and direct marketer dated December 20, 2024, Baywa Re will certainly cut around 350 jobs (full-time equivalents, FTE) during the new financing period in order to comply with the key points of the restructuring report from Boston Consulting. However, as the company is withdrawing from secondary lines of business through sales and is already restructuring, the job cuts could affect up to 2,400 of the 4,250 jobs worldwide. Previously, there had only been talk of 1,500 positions being cut across the entire Baywa agribusiness group (we reported).

In the first three quarters of this year, Baywa Re was the group's problem child: its operating business (EBIT) slipped from plus 106 million euros into the red at minus 165 million euros. The Group was left with only a double-digit positive EBIT in the millions. The reasons given for Baywa Re's imbalance were the stockpiling of expensively purchased PV modules, delays in project development and initial restructuring costs.

In addition to a guarantee line from the banks in the three-digit million range, EIP, which holds 49 percent of Baywa Re, provided a shareholder loan in the double-digit million range in October, when the company reported on the restructuring report by Boston Consulting. In addition, a particularly large number of project sales have brought fresh money into the company's coffers (we reported).

Talks about takeover by EIP

Baywa Re is apparently already in "advanced talks with EIP about further strengthening the capital of 'BayWa r.e.', which could lead to a change of control in favor of EIP". The aim is to conclude the transaction during the first quarter of 2025.

Baywa Re listed examples of which activities will continue to be considered core business, in which the company has a good competitive position and which have a positive market forecast: project development in the wind, solar and battery storage sectors, the operation of its own 'Independent Power Producer' (IPP) plants - and thus also its position as a direct marketer -, maintenance and energy trading, which is largely located at the Leipzig site (former Clens Clean Energy Sourcing).

The performance target in project planning is more than 2,000 MW per year. The company's own position of 1,000 MW of green power plants in operation is set to grow from 2026 following "optimization".

The company also wants to continue to operate worldwide, but focus on markets "with low economic risk" and "with growth opportunities". It was not disclosed which countries these are, nor which activities would be divested. It is known that Baywa Re is divesting its own software development activities. And finally, Baywa Re is about to centralize cross-divisional functions such as controlling, finance and human resources.

The commercial goal

The new Chief Restructuring Officer (CRO) Felix Colsman formulates the commercial target by the end of 2027 as follows - he refers to the "Repower" restructuring program and with "EBITDA" to earnings before interest, taxes, depreciation and amortization (EBITDA): "After implementing all necessary transformation measures, the new Baywa Re will achieve a market-standard EBITDA margin with a balanced risk profile across all business areas."

Author: Georg Eble