The restructuring process of the troubled battery manufacturer Varta has cleared another major hurdle. Varta CEO Michael Ostermann informed the German Press Agency that an agreement has now also been reached with the certificate of indebtedness lenders. "We have negotiated for a long time and have now found a solution," Ostermann said. He expects that the majority of creditors will agree to the concept, which could speed up the restructuring process.

Almost all affected groups support the concept announced in August, except for small shareholders. They face a total loss of their investments as they are being forced out of the company. Investor protection groups have already announced resistance, but the interests of small shareholders are being undermined under the Corporate Stabilization and Restructuring Act (StaRUG).

The restructuring plan includes a debt haircut and the extension of loans. The group's liabilities are to be reduced from just under half a billion euros to around 230 million euros. The debt haircut is therefore 30 million euros less than originally planned. Fresh capital is to be provided, among other things, through the entry of Porsche and loans from creditors.

The restructuring plan is to be submitted to the competent restructuring court at the beginning of October, or by mid-month at the latest, according to Ostermann. The Varta CEO hopes to complete the process by the end of the year. However, the restructuring is to be finalized by the end of January 2024 at the latest.

The restructuring is expected to finance Varta until the end of 2027, and job cuts in administration are also planned. Varta initiated the pre-insolvency proceedings in July, which significantly caused the stock price to plummet. The company currently employs around 4,000 people.

Varta has been in a crisis for a long time due to the fluctuating demand for lithium-ion button cells, which are used, among other things, in headphones. Additionally, the company is battling against cheap competition from China. In February, production was also paralyzed for weeks due to hacker attacks. Besides external factors, management mistakes are also cited as reasons for the crisis.

In the course of 2023 so far, Varta has recorded sales of around 554 million euros, but no more recent figures have been published due to the hacker attack. The 2023 annual report is expected at the end of October, with figures for the first quarter of 2024 to follow in November.

The Varta stock closed 0.51 percent lower on Wednesday at 1.55 euros in XETRA trading. In after-hours trading on Tradegate, the stock lost an additional 1.99 percent and fell to 1.53 euros.