According to Reuters, German battery manufacturer Varta announced on July 21 that the company is discussing two restructuring plans, which may involve luxury sports car manufacturer Porsche acquiring a stake.
In a statement, Varta indicated that the two plans include a potential new investor plan (involving current major Austrian shareholder Michael Tojner and Porsche) and another plan involving financial creditors.
Varta stated that it has decided to notify the relevant courts of its ongoing comprehensive reform under the German Corporate Stabilization and Restructuring Act. The company added that without this action, it would have to bear the losses from the depletion of its equity.
Currently, Varta has a market value of €440 million (approximately $479 million). Earlier this month, the company mentioned that it was in talks with Porsche about a potential investment, which could result in Porsche becoming the major shareholder of Varta's V4Drive business.
Meanwhile, Varta's statement on July 21 revealed that Porsche might directly acquire a stake in the company. Porsche confirmed that it is in negotiations with Varta to obtain a majority stake in V4Drive through a possible capital increase.
Porsche stated in a press release, "The premise of this cooperation is that Varta has a solid financial foundation. Therefore, in certain circumstances, Porsche could participate in the overall financial restructuring of Varta. Discussions in this regard are still ongoing."
In April of this year, Varta indicated that it might not achieve the goals set in its restructuring plan and is exploring capital restructuring options to help the company achieve "profit growth" by the end of 2026. Varta hopes to make a final decision on the choice between the two plans, adding that both plans involve funding the restructuring measures through debt capital or a combination of debt and equity amounting to tens of millions of euros.
Varta stated that both plans would result in the group's equity being reduced to zero, leading existing shareholders, except for Michael Tojner, to leave without compensation and causing Varta's stock to delist.
Additionally, Varta plans to significantly reduce the debt of certain creditor groups and delay the repayment of the remaining debts. Varta noted that neither plan is likely to receive the necessary majority vote at the shareholders' meeting. The company added that if the court approves the proposed restructuring plan, it could implement the plan without the approval of the investors.
