Varta and Porsche have signed contracts

The restructuring of the ailing German battery manufacturer Varta, based in Ellwangen, Swabia, is now taking its final shape. As reported, sports car manufacturer Dr. Ing. hc F. Porsche AG joins Varta. Porsche registered the merger with the Federal Competition Authority on Monday.

The car manufacturer intends to “acquire approximately 50 percent of the shares (non-controlling)” in Varta AG and the acquisition of approximately 70 percent of V4Drive Battery GmbH, whose shares are currently fully held by Varta AG. In the future, Porsche wants to take sole control. V4Drive Battery develops lithium-ion cells for electric cars.
But that’s only half the story. Because the acquisition of 50 percent is only an interim step, a Varta spokesman explained to the KURIER.

In the end, Porsche and the Tojner Group will each hold 32 percent of the shares and the financing bank will hold 36 percent. Varta is undergoing restructuring proceedings under the Corporate Stabilization and Restructuring Act (StaRUG). The contracts with the lenders and promissory note creditors on the one hand and with the future shareholders, investor Michael Tojner and Porsche, on the other hand have been signed, Varta announced on Monday. They each provide 60 million in equity capital. Until the StaRUG process is completed, Varta will also receive a bridging loan of 30 million euros. The restructuring plan is scheduled to be finalized in October.

Varta agreed on a restructuring plan in mid-September after weeks of struggle with its promissory note creditors. The company announced at the time that major financial creditors and major shareholders Michael Tojner and Porsche had agreed on an improved compromise. This means that the creditors of the promissory note loans also agreed to the restructuring concept on the basis of changed conditions. “We have now reached another milestone and want to get Varta back on the road to success in the long term,” said Varta boss Michael Ostermann. The restructuring is a hard and rocky road.

According to an insider, the negotiations with the promissory note creditors had dragged on because the Whitebox hedge fund in particular had insisted on improvements in its favor. The British fund is considered particularly aggressive and had bought into the promissory notes. With a nominal value of 250 million euros, the subscribers to the promissory note loans are the largest group of creditors. A blockade by them could have jeopardized the restructuring of Varta via pre-insolvency StaRUG proceedings. In order to ensure liquidity, a group of larger financial creditors have now agreed to a bridge loan of 30 million euros until the process is completed.

Varta had overextended itself with a risky expansion course and failed investments and is seeking rescue in the StaRUG process. A compromise was reached in mid-August: According to this, the sports car manufacturer Porsche and major Varta shareholder Tojner would give a total of 60 million euros in fresh capital. In return, creditors would have to waive more than half of their loans. A third partner could come on board later.