VARTA AG, the German battery manufacturer, has announced that it has agreed with its financial creditors and strategic investors on a viable restructuring concept.
The restructuring of the balance sheet initially focuses on a haircut, which will reduce the existing financial liabilities by €285 million (~$314 million) from €485 million (~$535 million) to €200 million (~$221 million) in the future.
The second component of the reorganization plan involves a complete reduction of VARTA AG’s share capital to zero. Following this reduction, VARTA AG will receive €60 million (~$66 million) in new equity through a capital increase, with €40 million (~$44 million) provided in cash.
The company will also secure another €60 million (~$66 million) in new funds through a senior secured loan. These funds are expected to bolster the Group’s liquidity and support future strategic investments in technological development.
“With the financial restructuring measures and the commitments of individual investors, we have created the balance sheet basis to fully realize VARTA’s potential for innovation and technology leadership as well as being a reliable partner and employer,” said CFO Marc Hundsdorf.
The capital increase will be initially subscribed to by the German sports car manufacturer Porsche and a company controlled by DDr Michael Tojner (MT InvestCo). The new senior financing of €60 million (~$66 million) will be provided by existing lenders. In the future, they will also participate in the economic equity of VARTA AG via a virtual shareholding of 36%, with the remaining 64% being shared by MT InvestCo and Porsche – each with 32%.
“Despite the current economic challenges, the company offers great potential to make Europe’s battery cell research and production less dependent on Asian suppliers. Together with Porsche, we want to contribute to this. With today’s agreement, we have together taken an important first step that secures the stability of VARTA AG and paves the way for a new start,” said DDr Michael Tojner, Chairman of the Supervisory Board and majority shareholder.
According to Mercom’s 1H and Q2 2024 Funding and M&A report for Energy Storage and Smart Grid, Corporate funding for energy storage companies in the first half of 2024 reached $15.4 billion across 64 deals, marking a 117% increase year-over-year compared to $7.1 billion in 59 deals in the first half of 2023, driven by a strong first quarter.
Earlier this year, Verkor, a manufacturer of lithium-based battery cells and modules, secured over €1.3 billion (~$1.41 billion) in green financing supported by 16 commercial and three public banks.
