The struggling battery company Varta has apparently taken a decisive step towards restructuring. According to a company press release on Saturday, the creditors and the Austrian major shareholder Michael Tojner agreed on a restructuring plan that provides for a debt cut from 485 million to 200 million euros. At the same time, Tojner, together with the sports car manufacturer Porsche, is injecting fresh capital of 60 million euros.
The remaining shareholders will therefore come away empty-handed, as the company’s share capital will be set to zero, according to a press release from the German company. The new owners of Varta will be the previous majority shareholder Tojner and the Porsche Group, whose possible entry had already been rumored. The creditors will also provide a further 60 million euros in the form of senior secured loans. The banks that provide new loans will receive 36 percent of possible future distributions.
“Despite the current economic challenges, the company offers great potential to make Europe’s battery cell research and production more independent of Asian suppliers. Together with Porsche, we want to make a contribution to this. With today’s agreement, we have taken a first important step that will secure the stability of VARTA AG and pave the way for a new start,” Tojner commented on the capital injection.
After Tojner and Porsche, however, a third shareholder could come on board. “We are in advanced talks with other investors who would like to join us,” Varta CEO Michael Ostermann told the Reuters news agency.
With the restructuring plan, Varta’s bankruptcy is off the table for the time being, as a company spokesperson told APA. However, the so-called pre-insolvency procedure remains in place. In July, Ostermann announced a radical restructuring under the German StaRUG restructuring law. After costly bad investments, the company was no longer able to service its mountain of debt.
The compromise does not threaten the company with any major operational cuts. “We want to grow, both with battery storage for photovoltaic systems and with button cells for Apple headphones. We are currently even looking for staff there,” said Ostermann, according to Reuters. Varta will hold on to all locations in Germany. Only in administration will there be a “moderate” reduction in jobs. “We will put Varta back on a profitable growth path.”
