Porsche is set to invest in Varta, the struggling battery manufacturer, as part of a newly agreed-upon restructuring plan aimed at reducing Varta’s debt and securing fresh capital. While shareholders will lose their investments, Varta CEO Michael Ostermann has hailed the agreement as a “milestone.”
The rescue plan for Varta is now in place, with Porsche committing €30 million to help save the company. Major shareholder Michael Tojner, Porsche, and most creditors reached a compromise after lengthy negotiations on how to reduce Varta’s debt and inject new capital. According to the company, liabilities will be reduced from €485 million to €200 million initially. However, shareholders will lose their entire investment. Varta’s CFO, Marc Hundsdorf, described the agreement as a crucial breakthrough.
Tojner and Porsche will become the new owners of Varta, jointly contributing a capital injection of €60 million. An additional €60 million in secured loans will come from creditors. A third investor may also join later. “We are in advanced discussions with additional investors who are interested in joining us,” Varta CEO Michael Ostermann told Reuters.
Tojner commented, “Today’s agreement marks an important first step towards securing Varta AG’s stability and paving the way for a fresh start.” The Austrian investor currently owns over 50% of Varta. The combined old and new loans—totaling €260 million—have a maturity date set for the end of 2027.
In July, Varta CEO Ostermann announced a radical restructuring under the StaRUG restructuring law, acknowledging that the company could no longer service its debts due to costly failed investments. “I am glad we have reached this important milestone. Now, everything must be formalized into contracts,” Ostermann told Reuters. “It could take another three months before the StaRUG process is completed.”
Varta: Job cuts in administration
Operationally, the workforce is not expected to face deep cuts, according to Ostermann: “We want to grow, both with battery storage systems for photovoltaic systems and with button cells for Apple headphones. We are even currently hiring in those areas,” he said. Varta will maintain all its locations in Germany, though there will be a “moderate” reduction in administrative staff. “We will bring Varta back to a profitable growth path,” he added.
Since Monday, owners and creditors had been struggling to find a solution. Two proposals had been on the table since July—one from Tojner and Porsche, and another from the creditors. After the compromise, the banks providing new loans will receive 36% of potential future distributions, though they may need to be patient. Legally, Tojner and Porsche will each hold 50%. Porsche, a subsidiary of Volkswagen, is particularly interested in securing access to high-performance batteries for its hybrid and electric sports cars. Porsche even aims to take a clear majority stake in Varta’s “V4Drive” division, according to Ostermann.
Despite the impending total loss, Varta’s stock was still valued at around €160 million on Friday. Small shareholders and speculative investors were hoping for the right to participate in a capital increase, but they are left empty-handed as Varta is being delisted from the stock exchange. “We tried everything to keep the small shareholders on board, but it’s legally impossible in this situation,” Ostermann said. Varta cannot produce the necessary prospectus for a broad capital increase due to the lack of an audited financial statement.
An alternative proposal from some bondholders, which would have granted all shareholders subscription rights, was rejected as unfeasible, according to participants. The bondholders, including several hedge funds, have the most at stake with €250 million tied up in Varta. However, they are divided; some support the agreement. Under StaRUG, individual creditors cannot block the restructuring process.
