By Bernd Röder, dpa I Sunday, August 18, 2024
BERLIN – German sports car manufacturer Porsche intends to invest in the financially troubled battery firm Varta.
The Stuttgart-based carmaker plans to acquire a majority stake in Varta’s car battery subsidiary V4Drive Battery, Porsche AG announced from its headquarters in Stuttgart on Saturday as Varta announced restructuring plans.
Porsche also expressed its willingness to participate “with further partners” in the financial reorganization of Varta AG, it said.
Porsche’s investment would amount to €30 million ($33.1 million).
“In this context, it is planned that Porsche will acquire a majority stake in V4Drive Battery GmbH through a capital increase, mostly against contributions in kind,” said Porsche.
Varta, which is based in the south-western German town of Ellwangen, bundles its business for large-format lithium-ion round cells, which are used in the hybrid drive of the Porsche 911 Carrera GTS, in this company
Participation in the financial reorganization is to take place as part of the intended restructuring proceedings, explained Porsche. Furthermore, the takeover of V4Drive would be subject to antitrust approvals in various countries, it said.
Varta meanwhile said it has reached agreement with creditors on a restructuring concept.
This concept will “significantly reduce the company’s debt and provide it with fresh liquidity,” Varta announced on Saturday.
It envisages the involvement of a company controlled by Varta majority shareholder Michael Tojner, MT InvestCo, and a Porsche investment company as new shareholder.
The reorganization concept is expected to secure the financing of Varta AG until the end of 2027.
According to the information provided, Varta’s debt burden is to be reduced from €485 million to around €200 million by means of a debt cut and the extension of loans.
MT InvestCo and the Porsche investment company would then inject a total of €60 million in fresh capital and receive new Varta shares in return.
After completion of all capital measures, MT InvestCo and Porsche will each hold 32% of Varta, with the other financiers together holding 36%.
Tojner had said in early August that he hoped for a resolution of Varta’s future by the end of the year.
“We hope to have a solution by the end of August or early September,” Tojner told the broadsheet daily Frankfurter Allgemeine Zeitung.
This outcome would then have to go through the procedure under the Corporate Stabilization and Restructuring Act (StaRUG).
The battery firm applied for pre-insolvency restructuring proceedings in July.
To secure production until 2027, the company needs around €100 million in fresh cash and a debt reduction, according to previous statements from company head Michael Ostermann.
