German battery manufacturer Varta announced on Sunday that it is currently exploring two restructuring scenarios that could potentially involve luxury sportscar maker Porsche taking a stake in the company. The first scenario includes new investors such as the existing Austrian majority shareholder Michael Tojner and Porsche, while the second scenario involves financial creditors.
In a statement, Varta revealed that it has initiated discussions on restructuring in accordance with Germany's corporate stabilization and restructuring act to prevent incurring losses that would deplete its share capital. With a market value of 440 million euros, Varta earlier revealed ongoing negotiations with Porsche regarding a potential investment that could lead to Porsche becoming the majority owner of Varta's V4Drive business. However, the latest statement suggests that Porsche might consider a direct stake in Varta itself.
Porsche confirmed that it is in talks to secure a majority stake in V4Drive through a potential capital increase, contingent on Varta's financial stability. The battery maker acknowledged in April its uncertainty in meeting restructuring targets and is now exploring recapitalization options to achieve "profitable growth" by 2026.
Varta aims to promptly decide on implementing one of the two proposed scenarios involving debt capital or a mix of debt and equity worth a substantial double-digit million euro amount for restructuring initiatives. Both proposals entail reducing the group's share capital to zero, leading to existing shareholders, except Tojner, exiting without compensation and a subsequent delisting of Varta's shares.
The restructuring plans also include a significant debt reduction for specific creditor groups and the postponement of outstanding claims. Varta highlighted the unlikelihood of garnering the required majority approval from shareholders at the general meeting for either proposal. However, if approved by courts, the proposed restructuring could move forward without the need for investor consent.