According to majority owner Michael Tojner (58), the future of the severely ailing battery company Varta should be clarified by the end of the year. “We hope that we will have a solution by the end of August or beginning of September,” Tojner told the “Frankfurter Allgemeine Zeitung”. This result would then have to go through the procedure according to 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 the fight for survival, Varta becomes, among other things Pushing shareholders out of the company. In addition, creditors should forego a large part of their money and their claims. The value of Varta shares plummeted after the announcement. Around 4,000 people recently worked at the company from Ellwangen, Swabia.
Half a billion euros in debt
In order to secure production until 2027, the group needs around 100 million euros in fresh money and a haircut, according to previous statements by company boss Michael Ostermann. Varta owes almost half a billion euros to major lenders such as banks and hedge funds. There are currently two rescue proposals on the table: One comes from Tojner and the Stuttgart sports car manufacturer Porsche, the other of four hedge funds that bought into Varta’s loans from banks.
Negotiations are currently underway, which, according to Tojner, are very professional but also tough. Everyone wanted to avoid bankruptcy. “We talk to banks, creditors, other investors and also the funds. And we hope to come to a result that everyone can live with,” said the 58-year-old, who is also the head of the Varta supervisory board.
Porsche could give money
He only explained vaguely about the joint proposal with Porsche: “Part of the equity would come from us, the rest from new banks and Porsche. But we would also undertake to draw additional money if that were necessary for the renovation.” Now we have to see which package is the best. Above all, Varta needs equity capital: “In my opinion, too much new debt capital 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 conduct research again – and must not be sucked dry.”
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. To make matters worse, hackers attacked the company’s computer systems in February and paralyzed production for weeks. But there are also management errors.