(Bloomberg) -- German commodities company BayWa AG, which is undergoing a wider restructuring, marked impairment losses of over €222 million ($248 million) in its first-half results.
More than three-quarters of the losses stemmed from its renewable energy unit BayWa r.e., according to a statement Friday. BayWa holds a 51% stake in BayWa r.e., with the remainder being held by Swiss investor Energy Infrastructure Partners.
“These write-downs have no negative impact on the BayWa Group’s ongoing reorganisation efforts and the implementation of the restructuring concept currently being developed,” the company said in the results. It reported a 15% year-on-year decline in revenues to €10.7 billion in the first six months of the year.
The losses were driven by writedowns from BayWa’s wind and solar plants following shifts in valuation assumptions as a result of lower electricity price curves and higher capital costs. BayWa added that a separate restructuring report, which acts as a blueprint for a company’s turnaround, has been commissioned for BayWa r.e..
Munich-based BayWa, whose business spans construction, renewable energy and agriculture, entered into negotiations with creditors after higher financing costs and volatility in its projects business squeezed liquidity. The company is envisaging a multi-year reorganization as part of its restructuring, which will include the sale of business divisions.
The company noted that an earnings forecast for the financial year 2024 was not currently possible.
The company is negotiating an extension to a debt standstill expiring on Sept. 30 as well as a second round of bridge financing, Bloomberg previously reported, to allow time to strike a deal. The company already agreed a liquidity package of €547 million in August with its main bank lenders and shareholders Bayerische Raiffeisen-Beteiligungs AG and Raiffeisen Agrar Invest AG.
(Updates with details from results throughout.)
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