Porsche is assertively marching towards dominance over Varta.
Escape from Financial Struggles in Ellwangen: Varta AG Secures Funding for the Next Decade Thanks to Support from Major Client Porsche
The battery giant Varta, which was struggling, is now seeing a glimmer of hope. Porsche, its significant customer, is extending a financial lifeline to the company located in Ellwangen. Varta has managed to negotiate a restructuring plan with its main creditors and financial backers, as per the announcement made by the stock corporation.
This restructuring plan is set to "substantially decrease the company's debt and provide it with additional liquidity." It involves the entry of a company governed by Varta's principal shareholder Michael Tojner (MT InvestCo) and a Porsche investment company as new shareholders. This restructuring plan will guarantee Varta AG's financing up until the end of 2027.
It is anticipated that a debt reduction and expansion of credits will decrease the current debt load of 485 million euros to approximately 200 million euros. MT InvestCo and the Porsche investment company will subsequently invest a combined 60 million euros into fresh capital and receive new Varta shares in return. Following all capital activities, MT InvestCo and Porsche will each own 32% of Varta, with other financiers accounting for 36%.
Porsche had previously revealed its intention to acquire a majority stake in Varta's automotive battery subsidiary V4Drive Battery. Moreover, Porsche expressed an interest in collaborating with other partners in financing the restructuring of Varta AG, with its investment amounting to 30 million euros.
"Plans are in place for Porsche to acquire a majority controlling interest in V4Drive Battery GmbH through a stock issuance - primarily via an in-kind contribution," Porsche announced. This entity encapsulates Varta's business associated with large-format lithium-ion round cells, which are used in the hybrid drive of the Porsche 911 Carrera GTS.
Varta's restructuring plan includes contributions from various financiers, with other entities besides MT InvestCo and Porsche collectively owning 36% of the company after the capital injection. Additionally, Porsche is open to collaborating with other partners in financing Varta's restructuring.
