Varta on the brink of extinction: creditors want to break up the company

The most important backers of the Swabian company based in Ellwangen have lost patience. In a statement they called for the company to be broken up: the household battery business should be separated from the group. The Deutsche Bank and the financial investors RBC BlueBay, Blantyre und Whitebox – brought together in a so-called ad hoc creditor group – are in favor of a new ownership structure.

The reason for the radical change of course is explosive: the company from Ellwangen is running out of money. An independent analysis by the management consultancy FTI brings to light the full extent of the crisis. Accordingly, Varta is missing a “mid-double-digit million euro amount” for its current business alone – money that is necessary to pay suppliers, transfer salaries and keep machines running. And that’s just the operational liquidity needs. In addition, according to the report, there is a “significant additional capital requirement” in order to continue business operations on a long-term basis.

Statement from Michael Tojner

“We regret this step by the financing banks, which was unfortunately foreseeable in this form. With the loss of the large US customer Apple It was clear that Varta could not be continued in its existing form and needed a further restructuring step. High energy prices, high wage costs and other locational disadvantages make the development of the battery business in Europe a major challenge compared to Asia,” explains Austrian investor and Varta shareholder Michael Tojner when asked by KURIER.

And he goes on to say: “In the past few weeks we have had intensive discussions with the banks about viable future prospects. However, they have now decided to spin off and exploit the consumer sector. The Montana group will endeavor to separate the microbattery division and the solutions business from the restructuring process in order to retain and continue the know-how in battery production in Europe. This would also include Varta Innovation Graz and the subsidiary in Romania.”

However, this will involve further restructuring proceedings and tough cuts. “We have developed a detailed concept for this and will try to position the Varta Group in niche areas with the remaining parts of the company,” says Tojner.

Varta is owned 32 percent by Tojner’s MT-Invest, 32 percent by a Porsche AG investment company and 36 percent of the shares are held by other investors.