German Manager Magazine: Varta: Battery company removed from Stoxx indices003463

The Battery company Varta, which is struggling to survive receives the red card from the index provider Stoxx. The share will be removed from all indices on July 30th, it announced late on Thursday evening.

Varta is trying to save itself with drastic measures: the old shareholders are to be forced out of the group and creditors are to forgo a large part of their money and their claims. Investors should also come on board. This was intended to avert a possible insolvency of Varta, it was said a few days ago.

Demand fluctuates greatly

The battery company has been in crisis for a long time because business is no longer running smoothly. The demand for small lithium-ion button cells, for example for headphones, fluctuates greatly. Varta also recently complained about low-cost competition China and ongoing problems in supply chains. To make matters worse, hackers attacked Varta’s computer systems in February and paralyzed production for several weeks.

The share price has therefore been on the decline for some time. At the end of the main Xetra trading session on Thursday, Varta was still trading at 2.17 euros. On Friday evening it was slightly higher again at 2.34 euros. According to the stock market, the company is now only worth a good 90 million euros.

Varta was listed on the stock exchange in 2017 at 17.50 euros per share and was in demand for a long time. At the beginning of 2021, the price had risen to 181.30 euros. But things have been going down since then.

Because of the massive problems in the company, the Corporate Stabilization and Restructuring Act (StaRUG) should come into effect. This stipulates that individual shareholders or creditors no longer have any rights in order not to endanger the existence of an operationally viable company. A haircut is also to be carried out, which, according to the announcement, the creditors would only agree to if the equity capital was reduced to zero.

Varta has financial needs in the high double-digit million euro range. The participation of financial creditors and investors is also planned for coverage. Negotiations are currently underway with, among others, the previous majority owner Michael Tojner (58), who is also chairman of the supervisory board, and the Sports car manufacturer Porsche AG, which is part of the Volkswagen Group . He had only announced at the beginning of the month that he wanted to buy Varta’s electric car battery business.

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