The crisis at Varta has recently come to a head. Now a solution seems to have been found that could ensure the battery company’s survival. However, it could still be months before everything is sorted out.
The timetable for the restructuring of the ailing battery company Varta is becoming more concrete. The agreement must now first be documented and submitted to the restructuring court, said a Varta spokesman. For this to happen, the committees of the parties involved must agree and the Federal Cartel Office must give the green light. This could take several weeks. It is expected that a few months will pass before the restructuring plan is finalized. It is hoped that the process will be completed this year.
The company announced an agreement with financial creditors and investors at the weekend. Key aspects of the restructuring plan include a debt cut and fresh money – for example from sports car manufacturer Porsche. If everything goes as planned, the plan should ensure the financing of Varta AG until the end of 2027. Jobs in administration are also to be cut.
The battery company filed for pre-insolvency restructuring proceedings in July. In the fight for survival, Varta also wants to force the old shareholders out of the company. The value of Varta shares plummeted after the announcement almost a month ago. The company from Ellwangen in Swabia recently employed around 4,000 people.
The crisis has been going on for some time
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 a possibility.
In the first nine months of 2023, Varta had sales of around 554 million euros. There are no more recent business figures due to the hacker attack. Information on the first quarter of 2024 is expected on August 30, and the 2023 annual report at the end of October.
Source: Stern
