Rescue at shareholder expense: Investor advocates want to stop Varta’s restructuring in court

The SdK investor group wants to stop the restructuring plan for the battery manufacturer Varta before the Federal Constitutional Court. The reason is the reduction of the share capital to zero as part of the restructuring, which would mean that the independent shareholders would completely lose their money. The SdK announced this at the presentation of the new task of the annual “Black Book Stock Exchange”. Varta CEO Michael Ostermann defended the restructuring process.

Accusation: Restructuring law leads to expropriation of shareholders

The Varta restructuring is taking place within the framework of the restructuring law StaRUG, which is intended to spare crisis-hit companies from insolvency proceedings. The SdK’s main criticism is that the StaRUG makes it possible for stock corporations to temporarily set their capital to zero before increasing it again. The free shareholders then go away empty-handed. “In doing so, the legislature has effectively established an expropriation of shareholders without compensation,” accuses the SdK of the federal government in the new “Black Book”.

The investor community had already filed a constitutional complaint once, but Karlsruhe did not accept it. Now that the restructuring plan has been confirmed by the Stuttgart District Court, the SdK is planning an expanded constitutional complaint, as board member Markus Kienle said.

Varta CEO: Without restructuring, the company would be at risk

Ostermann said of the SdK’s criticism: “I don’t want to estimate what chances the legal complaints have in court. We understand the disappointment of the small shareholders,” said the manager. “But the StaRUG process has no alternative for Varta. It’s about 4,000 jobs and the future of Varta.” Without the StaRUG there would be massive damage that would not only affect the small shareholders, “but the entire company, its future viability and therefore of course all employees.”

Second complaint goes to the Stuttgart District Court

The law offers “high potential for abuse,” criticized Kienle. “For the independent shareholders, carrying out the procedure is usually associated with a total loss.” The SdK wants to take action against the Varta restructuring plan at two judicial levels: In addition to the extended constitutional complaint, the SdK wants to file an immediate complaint against the judicial confirmation of the restructuring plan at the Stuttgart District Court.

The Varta plan: haircut and reduction of share capital

The two main components of the Varta restructuring concept are a haircut and the reduction of the share capital to zero. Varta would be delisted and its shareholders would leave without compensation. “Whoever has the planning authority also determines the result,” said Kienle.

Varta then wants to issue shares again – but only to a company owned by the previous majority owner Michael Tojner and the sports car manufacturer Porsche. Both of them cost 30 million euros each. A similar procedure had previously taken place in the restructuring of the automotive supplier Leoni, in whose restructuring the independent shareholders also came away empty-handed.