The battery manufacturer is under great pressure to restructure.
(Photo: dpa)
Munich The Swabian battery manufacturer Varta has to save drastically under pressure from the banks – and also wants to cut jobs. The major Austrian shareholder Michael Tojner is now ready to support the highly indebted company from Ellwangen with 50 million euros, as Varta announced on Monday.
The creditor banks had requested a restructuring report to check the company’s viability. The auditors from KPMG came to the conclusion that Varta could be restructured and had “clear growth prospects”. The prerequisite for this, however, are cost reductions in procurement, internal processes and personnel as well as a broadening of the customer base. And: a quick injection of capital.
Varta currently employs 4700 people. Discussions with the employee representatives are now to begin. A specific number of how many employees have to go has not yet been determined, said a spokesman.
“The aim of further restructuring measures is to return to a stable growth path,” said the statement on Monday. Above all, the business with micro batteries, button cells and household batteries must become more profitable. Personnel measures are also planned, the company said.
There is no final agreement with the banks, but the talks are well advanced, the company said. It is the prerequisite for the majority shareholder Tojner (55 percent) to inject 50 million euros in fresh capital with his Montana Tech Components.
Varta share price collapses
“With the restructuring concept presented, we are maintaining the balance between necessary restructuring measures and the development of our growth potential,” said the new CEO, Markus Hackstein.
With the proceeds from the sale of up to 4.04 million new shares to Tojner, Varta wants to invest “specifically in important fields of innovation”, especially in the energy storage business. The data results in a minimum price of EUR 12.37 per share if the entire number of shares in the authorized capital is issued.
However, the actual issue price will not be significantly below the market price. Conversely, this means that at the current price, only around half of the shares would have to be issued. However, it is unclear whether the stock will continue to plummet. Hedge funds have been speculating on this for months. On Friday, Varta closed at EUR 28.96. On Monday morning, the share collapsed by 11.2 percent to 25.71 euros.
Varta had had to lower its forecasts several times in the past year. Due to the falling demand for button cells for headphones – such as Apple’s “AirPods” – around 500 employees in Nördlingen have been on short-time work since December. Plans to build a new factory for battery cells for electric cars were stopped due to a lack of purchase commitments. However, the Swabians continue to produce a small series of the round cell/V4Drive for Porsche in a pilot plant.
Share 18 months ago at 160 euros
This is about a battery for accelerating sports cars, not directly about main drive batteries. But theoretically, the booster technology of the new Varta battery can also be used as the main drive after appropriate adjustment. So far, however, Varta has not been able to present any other customers and also no partner who would have to bring the necessary half a billion euros for the construction of a large-scale production facility.
The former darling on the stock market has come a long way. In autumn 2017, the company went public at the offer price per share of 17.50. 18 months ago the share was quoted at 160 euros.
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Then the crash followed because the company could not keep to its promises and the leap from mini battery manufacturers to car drive batteries for electric cars was not so easy to implement, despite 100 million euros in state subsidies. The share flew out of the MDax at the turn of the year.
Last November, the company revised its sales forecast downwards to a decline of ten percent to a maximum of 820 million euros. The company did not provide current figures. The release is announced for April 26th.
Chairman of the Supervisory Board Tojner explained that the restructuring was “not easy, but a necessary way to be able to return to the road to success”. Hackstein, who replaced long-time CEO Herbert Schein six months ago, has had Thomas Obendrauf, who was born in Styria, as the new chief financial officer since the beginning of February.
With agency material
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