BayWa Faces Twin Crises: DIY Subsidiary Insolvent as Energy Sale Hopes Evaporate

The restructuring of BayWa has turned into a full-blown existential crisis after a second major pillar of the group buckled. On Wednesday, the company’s DIY chain — operated jointly with partner Hellweg through two entities under the BayWa Bau- & Gartenmärkte umbrella — filed for insolvency in self-administration at the district court in Essen. The move came just as chief restructuring officer Michael Baur and CEO Frank Hiller were fighting to keep the group’s broader recovery plan on the rails.

About 4,000 employees are directly affected by the insolvency filing. The company confirmed that operations in both stores and online will continue uninterrupted for now, while wages for the next three months are covered by insolvency benefits. The management blamed rising purchase prices, high rents, and sustained consumer reluctance — with the slump in residential construction having dealt a particularly heavy blow to demand for home-improvement products. The court appointed lawyer Stefan Denkhaus as preliminary administrator.

The DIY collapse coincides with the implosion of what was supposed to be the group’s financial lifeline: the sale of its renewable-energy subsidiary BayWa r.e. Originally valued at around €1.7 billion and intended to fund the broader restructuring, the asset has seen its estimated worth plunge after changes in regulatory conditions, especially in the US. Management now expects 2030 operating EBITDA of just €150 million — a far cry from the targets set in the original restructuring report. Combined, the missing proceeds from the energy sale and the restructuring of the retail unit have blown new holes in the group’s financing plan.

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Pressure is mounting from the lending side as well. Bavarian cooperative banks have already written off 60% of a €220 million promissory note loan, after the Genossenschaftsverband Bayern internally warned members of potential total losses. That stiffens the atmosphere in ongoing talks with the group’s main creditors, DZ Bank and UniCredit. Market reports suggest the banks are pushing for a trust model that would effectively shift control away from the cooperative anchor shareholders and hand it to the lenders. For private shareholders, the situation has become binary: annualised volatility surpasses 100%, and the share price has slumped roughly 29% year-to-date — closing at €11.60 and trading more than 50% below its 52-week high of €23.90.

The legal dimension adds another layer of drag. State prosecutors are investigating former managers, and investor lawsuits over alleged deficiencies in corporate communications are tying up resources that the group can ill afford to divert from its operational turnaround. The stock now sits about 25% below its 200-day moving average of €15.49.

Restructuring talks must be concluded by autumn 2026. If no agreement on a sweeping debt haircut is reached by then, the entire recovery plan loses its legal foundation — and BayWa as it currently exists would face the endgame. The group is shrinking, partly by design and partly by force: recent disposals of stakes in Cefetra and RWA have eased bank debt, but the fundamental gap remains. As Baur seeks to squeeze the core business down to €10 billion in revenue, the interplay between creditors, shareholders, and the courts will decide whether the company can keep the lid open long enough to see a sustainable structure emerge.