Porsche considers an investment in Varta

Since the beginning of July, it has been known that Porsche is considering acquiring a majority stake in Varta subsidiary V4Drive. The sports car manufacturer is one of the few customers of Varta’s V4Drive cells. So far, these have not been used in purely electric Porsches but in the electrified 911, the 911 GTS T-Hybrid.

According to German Frankfurter Allgemeine Zeitung (FAZ), Porsche could take a stake not just in the production of the Varta subsidiary V4Drive but also in the parent company Varta AG. “The fact that the sports car manufacturer now apparently also wants to get involved with the parent company shows the dramatic situation of Varta AG,” says the FAZ. For Porsche, “only the high-performance cell is important.”

“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 obtained by the news agency Reuters.

Apparently, Michael Tojner, an Austrian company that holds a majority stake in Varta via the Swiss holding company Montana Tech Components, favours this plan. Another proposal comes from creditors. According to Varta, another possibility could be “a haircut is an agreement between the debtor and its creditors that cancels part of the debt in order to restore the company’s financial stability.” However, the battery maker notes that its “creditors would only be prepared to take this step at this point in time if a capital reduction to zero is implemented (the existing share capital is reduced to zero) and fresh capital (debt or equity and debt) required for the restructuring is injected.”

It is not yet clear which option Varta will choose. On Sunday, the company notified the Stuttgart District Court “on short notice of a restructuring project in accordance with the German Corporate Stabilization and Restructuring Act (StaRUG).” The goal is to avoid insolvency. The ailing battery manufacturer Varta also said that it believes that neither proposal would gain the necessary majority at a general meeting of shareholders. However, it will notify the relevant courts about the planned restructuring. If accepted, they would not need the investors’ approval.

Varta presented the first V4Drive cell suitable for electric cars in the 21700 format (2.1 cm diameter, 7 cm height) in 2021. In April of that year, the company initially presented it as the basis for a battery that would serve as a “booster” in premium and sports vehicles or as a storage unit for recuperation energy in hybrid vehicles – such as the Porsche 911. Varta wanted to push ahead with commercialisation quickly: Pilot production of the V4Drive cells in the 21700 format was announced at the time for the end of 2021, with mass production set to begin two years later – i.e. at the end of 2023 – and production capacity of at least 2 GWh. However, Varta put its plans in the automotive sector on hold at the end of 2022. It said it would only continue with its new factory for the V4Drive battery when it had binding commitments from customers. However, the operation of the pilot plant continued as planned.

Porsche acquiring a stake in the V4Drive division and contributing to the necessary Varta financing should come in very handy for the battery manufacturer. According to Varta, it need “high double-digit” million euro amount to receive a positive continuation forecast from the experts commissioned with the reorganisation report – this would allow Varta to avoid insolvency. Tojner would contribute around half. It is not known what share Porsche will take on.

hfaz.net (in German), reuters.com, varta-ag.com