Shares of German battery manufacturer Varta, majority owned by Austrian investor Michael Tojner, have plummeted by 80 percent! The ailing company plans to file for pre-insolvency proceedings soon – probably on Monday.
The shares were trading at a record low of €2.10 on Xetra on Monday morning – down 80 percent from Friday evening.
Shareholders must bleed heavily
“The latest developments make the situation even worse for shareholders,” says analyst Michael Punzet of DZ Bank. “The desired financial restructuring of Varta AG is clearly at the expense of existing shareholders and creditors.”
This could be a first step towards securing jobs and the company’s survival, says Punzeit. However, the announced capital reduction would lead to “shareholders leaving without compensation”. The expert has therefore reduced the fair value of the shares to 0 euros.
The deeply troubled battery company announced this weekend that it has filed for restructuring under the Corporate Stabilization and Restructuring Act (StaRUG).
Nearly 500 million euros in debt
The debt burden of almost 500 million euros must be reduced significantly and new capital of almost 100 million euros is needed, says CEO Michael Ostermann, who has been brought on board as restructuring manager.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
