German battery manufacturer Varta announced a debt restructuring deal on Saturday, securing a lifeline from sports car maker Porsche.
After intense negotiations, the company will reduce its debt from €485 million to €200 million.
Varta, which supplies batteries to the automotive, industrial, and consumer sectors, has been struggling financially. To resolve the crisis, major shareholder Michael Tojner, creditors, and Porsche reached a compromise.
Under the agreement, Tojner and Porsche will become Varta’s new owners, injecting €60 million in capital. Creditors will provide an additional €60 million in loans, and the company is seeking a third investor.
Porsche’s involvement in the rescue secures access to high-performance batteries for its hybrid and electric sports cars.
As well as investing in the entire group, Porsche announced that it would take a majority stake in V4Drive Battery GmbH – a division within Varta that focuses on the production of lithium-ion batteries.
“Varta and Porsche are already working closely together on the topic of high-performance battery cells. With the planned majority takeover of V4Drive, we aim to drive the company forward and would make an important contribution to keeping key technologies in Germany”, said Lutz Meschke, Deputy Chairman of the Executive Board and Member of the Executive Board for Finance and IT at Porsche AG.
