Battery manufacturer Varta has struggled with heavy debt for some time. Now, a turnaround is in sight through a debt restructuring plan and an investment from Porsche.
Varta agrees to debt restructuring and Porsche investment
Varta, the troubled battery manufacturer, has reached an agreement with its creditors for a debt restructuring. In addition, Porsche has committed to investing in the company after the debt cut, according to Varta’s announcement from its headquarters in Ellwangen, Baden-Württemberg, on Monday. As part of the agreement, Varta will also receive an additional €30 million in interim financing from its lenders.
Varta produces not only household batteries but also automotive and energy storage batteries. The company has accumulated hundreds of millions of euros in debt. In July, it declared that its debt burden made it impossible to continue operating and requested a debt reduction. Creditors demanded a complete capital cut to zero, meaning all existing shares would lose their value. Varta’s stock price, which was around €200 in early 2021, has since plummeted to about €1.40.
Investors to contribute €60 million
Varta confirmed that the plan has been approved and key agreements have been signed. The company also announced that it has secured an “investor agreement” with Porsche and its major shareholder, Austrian entrepreneur Michael Tojner.
Following the capital cut, the two investors will contribute a total of €60 million. “The agreement is subject to antitrust approval and other standard market conditions,” Varta stated. Additionally, the company secured short-term bridge financing of up to €30 million from a portion of its consortium lenders. This funding is intended to maintain operations until the restructuring process is completed, which Varta aims to finalize within this month.
