FrankfurtGerman battery maker Varta said on Saturday it had reached a restructuring agreement with its creditors, bringing in sports car maker Porsche to save its ailing business.
The deal, reached after days of intense negotiations, will reduce Varta’s debt from 485 million euros ($534.86 million) to 200 million euros initially, the company said.
Varta, which makes batteries for the global automotive, industrial and consumer markets, had been seeking a compromise between its largest shareholder Michael Tojner, creditors and Porsche to ease its debt and secure fresh capital.
Under the agreement, Tojner and Porsche will become the new owners of Varta and jointly provide a capital injection of 60 million euros.
Another 60 million euros will come from creditors in the form of senior secured loans, the company said, adding that a third investor could join later.
“We are in advanced discussions with other investors who would like to join us,” Varta Chief Executive Michael Ostermann told Reuters.
By helping to rescue Varta, Porsche will secure access to high-performance batteries for its hybrid and electric sports cars.
The German automaker also announced on Saturday that it would take a majority stake in Varta’s V4Drive Battery division through a capital increase mainly through an in-kind contribution.
“With the planned majority acquisition of V4Drive (…) we would make an important contribution to keeping key technologies in Germany,” said Lutz Meschke, Deputy Chairman of the Executive Board of Porsche AG.
In July, Ostermann announced a radical pre-bankruptcy restructuring of Varta, which was saddled with debt it could not service after costly investments.
“With the implementation of the measures agreed today, the Group’s financing and liquidity have been stabilised in a sustainable and long-term manner,” said Varta CFO Marc Hundsdorf.
“Moderate” job cuts
Ostermann said there was no immediate threat of major job cuts.
“We want to grow, both with storage batteries for photovoltaic systems and with button cells for Apple headphones. We are currently looking for staff,” he said.
Varta will keep all its production sites in Germany, with only “moderate” job cuts in the administration. “We will put Varta back on a profitable growth path,” he told Reuters.
However, current shareholders will be left empty-handed as Varta will be delisted following the restructuring.
“We tried in every possible way to get small shareholders into the company, but this is not legally possible in this situation,” Ostermann said.
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– 2024-08-19 05:06:27
