Investors look to break up German battery manufacturer VARTA

Key investors of the German battery manufacturer VARTA are looking at spinning off the household battery business from the group and are calling for a new ownership structure, they announced in a press release on Thursday.

The so-called ad hoc creditor group, led by Deutsche Bank and the financial investors RBC BlueBay, Blantyre and Whitebox, justified its change of course by citing the strained financial situation of the company, which is based in southern Germany.

VARTA declined to comment on the press release.

An independent analysis by the management consultancy FTI had revealed that VARTA had an operational liquidity requirement amounting to a mid-double-digit million-euro figure - in other words, a shortfall in funds for day-to-day operations. 

Added to this were significant further capital requirements to ensure the long-term continuation of business operations.

To avoid insolvency, VARTA recently filed for reorganization proceedings, and at the beginning of April last year it was announced that the battery manufacturer's months-long reorganization had been completed.

However, despite intensive discussions, no investor or other stakeholder has so far agreed to provide the missing funds, a spokesman for the creditors explained. 

The group had therefore concluded that spinning off and stabilizing the Consumer Battery division was the most viable course of action.

The group announced that it would exercise its contractual rights under the 2024 restructuring financing agreements. According to the statement, implementation is subject to regulatory and other approvals.