The future of the battery company Varta is at stake – and with it the jobs of around 4,000 people. Negotiations are currently underway on restructuring. A sports car manufacturer could become the savior.
According to majority shareholder Michael Tojner, the future of the badly hit battery company Varta should be resolved by the end of the year. “We hope that we will have a solution by the end of August or the beginning of September,” Tojner told the “Frankfurter Allgemeine Zeitung”. This result would then have to go through the process under the Corporate Stabilization and Restructuring Act (StaRUG). “That will take another two or three months. My goal is that we will have stabilized Varta by the end of the year and that there will be real prospects for the future.”
The battery company filed for pre-insolvency restructuring proceedings in July. In its fight for survival, Varta wants to force the old shareholders out of the company, among other things. Creditors are also expected to give up a large part of their money and claims. The value of Varta shares plummeted after the announcement. The company, based in Ellwangen in Swabia, recently employed around 4,000 people.
Porsche as savior?
According to previous statements by CEO Michael Ostermann, the group needs around 100 million euros in fresh money and a debt cut to secure production until 2027. Varta owes major lenders such as banks and hedge funds almost half a billion euros. There are currently two rescue proposals on the table: one comes from Tojner and the Stuttgart sports car manufacturer Porsche, the other from four hedge funds that have bought into Varta’s loans from banks.
Negotiations are currently underway, and according to Tojner, they are very professional but also tough. Everyone involved wants to avoid bankruptcy. “We are talking to banks, creditors, the other investors and also the funds. And we hope to reach a result that everyone can live with,” said the 58-year-old, who is also Varta’s supervisory board chairman.
The crisis has been going on for some time
He was vague about the joint proposal with Porsche: “Part of the new equity would come from us, the rest from banks and Porsche. But we would also undertake to subscribe to additional money if that were necessary for the restructuring.” Now we have to see which package is the best. Above all, Varta needs equity: “In my view, too much new debt would overwhelm the company, and in two years we would be in the same situation again. The company must be stabilized, it must be able to research again – and must not be drained dry.”
The battery company has been in crisis for some time now because business is no longer running smoothly. Demand for small lithium-ion button cells, for example for headphones, fluctuates greatly. Varta also recently complained about cheap competition from China. To make matters worse, hackers attacked the company’s computer systems in February and brought production to a standstill for weeks. But management errors are also suspected.
Source: Stern
