Porsche AG is considering taking a bigger role in investment for the rescue of Varta AG, according to people familiar. This Porsche deal is comes at a time when Varta, the embattled battery producer weighs options to restructure its debt. Porsche is considering taking a minority stake and going into a deal with Varta to safeguard a potential investment in the troubled battery maker’s large-format lithium-ion battery business disclosed earlier this month.
Porsche and Varta’s deal
The German luxury carmaker aims to not only get involved in Varta’s e-mobility battery unit but also to acquire a minority stake in the entire group, said the people, who asked not to be named as the matter is private.
Varta’s financial restructuring
Varta is currently weighing two proposals for a financial restructuring with creditors and potential investors, the company said in a statement Sunday. The Varta deal includes Porsche, a company controlled by Austrian entrepreneur and its majority shareholder Michael Tojner as well as other interested parties, it said.
Sunday’s statement, meanwhile, could see Porsche take a direct stake in Varta itself.
Under one potential deal to stabilize Varta, €100 million ($109 million) of fresh money would flow, the people said. Existing Varta shareholders would be wiped out, they added.
Banks stand to lose half of their claims over €485 million as part of the rescue operation, said the people, who added that Switzerland-based Montana Tech Components, run by Tojner, is also preparing financial support.
Varta’s market value
Varta, which has a market value of 440 million euros ($479 million), said earlier this month it was in talks with Porsche over a potential investment that could result in the carmaker becoming a majority owner of Varta’s V4Drive business.
Porsche said it could confirm that it was in negotiations with a view to acquire a majority stake in V4Drive via a possible capital increase.
“The prerequisite for this is a sound financial basis for Varta AG. Under certain circumstances, we could therefore imagine participating in a financial restructuring of Varta AG as a whole. Discussions on this are still ongoing,” Porsche said in a statement.
Varta’s outlook
Varta has been in talks with creditors after it failed to recover as expected following a debt restructuring in 2023. The company has pointed to a slump in demand in its core markets, as well as the impact of a cyberattack in February.
All potential restructuring options aim to inject a “high two-digit million euro amount” of fresh funds into the business, Varta said. Both proposals would entail a delisting of Varta’s share and certain creditor groups would also see a “significant” debt haircut, the statement said.
Porsche’s investment in Varta
Porsche and Varta announced their cooperation on the e-mobility subsidiary, which produces lithium-ion cells that can be used in electric vehicles earlier in July, causing Varta shares to surge.
Neither Porsche nor Varta were available for a comment on Sunday outside regular business hours.
