FAQ on the StaRUG-Proceedings
Answers to the most important questions
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“StaRUG” is the abbreviation for the “Act on the Stabilisation and Restructuring Framework for Businesses”, which came into force in Germany on 1 January 2021 and offers companies a quick and targeted way of restructuring financial liabilities without the need for insolvency proceedings.
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Despite repeated requests, a small number of financial creditors have not yet agreed to the financing concept, meaning that the company no longer expects to be able to persuade these individual creditors to give their consent voluntarily.
The StaRUG proceedings make it possible to implement the financing concept and the content of the long-term reorganisation agreement even without the consent of these individual creditors and to include them in an overall solution with all financial creditors. The consent of 75% of the financial creditors is sufficient to proceed. This majority has already been secured contractually.
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The StaRUG proceedings as applied by BayWa AG are a kind of “StaRUG light”, it only affects the financial creditor side and are therefore not comparable with other StaRUG cases known in Germany. In particular, shareholders do not lose their shareholding. There will be no capital reduction and the shareholders will have subscription rights to the new shares in the planned cash capital increase in proportion to their existing shareholding.
The financial creditors will also not be subject to any debt waivers in the “StaRUG light” proceedings. The financing concept essentially provides for the term of the loans to be extended until the end of 2027.
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The StaRUG proceedings offer legal certainty and strengthen the company’s going concern forecast.
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No, they relate solely to BayWa AG.
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The StaRUG proceedings have no impact on customers, suppliers and employees.
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Yes, the cash capital increase with subscription rights for all shareholders of BayWa AG with a volume of around €150 million planned as part of the financing concept is to be adopted as part of the StaRUG proceedings to simplify and accelerate the process. The two major shareholders of BayWa AG have undertaken to backstop the capital increase.
The StaRUG proceedings will include the resolution for the cash capital increase; subsequently, the capital increase will be executed, including the option for all shareholders to subscribe based on a prospectus.
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Beyond allowing all shareholders to exercise their subscription rights and participate in BayWa AG’s planned cash capital increase, the StaRUG proceedings will not involve any other corporate actions. Specifically, existing shareholders will not be forced out of the company in a capital reduction.
On the contrary: by being able to exercise their subscription rights as part of the planned capital increase, shareholders will have the option to continue to participate and benefit from a successful reorganisation of the company.
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The StaRUG proceedings have no bearing on the stock exchange listing of BayWa AG shares. The shares will continue to be traded on the existing stock exchanges.
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Yes.