The struggling battery company Varta has apparently taken a decisive step towards restructuring. Sports car manufacturer Porsche and Austrian major shareholder Michael Tojner are going to inject fresh capital after a haircut. Bankruptcy is therefore off the table for the time being.
According to a company statement, the creditors and Tojner have agreed on a restructuring concept that provides for a haircut from 485 to 200 million euros. At the same time, Tojner is injecting new capital worth 60 million euros together with sports car manufacturer Porsche.
Other shareholders are left empty-handed
The remaining shareholders will be left empty-handed as the company’s share capital will be reduced to zero, as per the German company’s announcement.
Tojner and Porsche new owners
Varta’s new owners will be former majority shareholder Tojner and the Porsche Group, whose possible entry had already been rumoured. Another 60 million euros will come from creditors in the form of senior secured loans. The banks that provide new loans will receive 36 percent of the possible future payouts.
A third shareholder could also join
After Tojner and Porsche, a third shareholder could come on board. “We are in advanced talks with other investors who want to join us,” Varta CEO Michael Ostermann told Reuters.
Bankruptcy is off the table for the time being
A bankruptcy of Varta is temporarily off the table with the restructuring concept, a spokesman for the company said in response to an APA request. However, the so-called pre-insolvency procedure remains in force. In July, Ostermann announced a radical restructuring in accordance with the German StaRUG restructuring law. After costly bad investments, the company could no longer pay off its mountain of debt.
There is no risk of major cuts to staffing levels
The compromise does not threaten the company with major operational cutbacks. “We want to grow, both with battery storage for photovoltaic systems and with button cells for Apple headphones. We are currently looking for staff there,” Ostermann said, according to Reuters. Varta will retain all locations in Germany. There only need to be “moderate” job cuts in the government. “We will get Varta back on a profitable growth path.”
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.
