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.

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