The ailing battery company Varta is once again calling on its lenders for help. A collapse in demand, cheap offers from competitors in Asia and a cyber attack set the company back in its restructuring. The concept from last summer is “no longer appropriate” to return to a profitable growth path as planned by the end of 2026, Varta announced on Thursday evening.
The Varta share price crashed after the news. Shortly after trading began on Friday, the stock lost up to 34 percent to 9.30 euros, falling to its lowest level since the IPO in 2017. So far this year, the stock has lost more than half of its value, and even more in the past five years than three quarters.
Varta’s crisis has worsened: the demand for small lithium-ion button cells for headphones, for example, is fluctuating greatly, and the demand for energy storage for electricity from solar systems has unexpectedly collapsed “significantly”. The group also complained about cheap prices from competitors for energy storage and ongoing problems in the supply chains.
Hacker attack brought production to a standstill
To make matters worse, hackers attacked Varta’s computer systems in February and paralyzed production for several weeks. It was now said that the economic consequences of the cyber attack could not yet be fully estimated. The company therefore had to postpone the presentation of its consolidated financial statements for the past year until after April 30th. That is why the company in Germany is likely to be excluded from the so-called small-value index SDax.
In 2023, Varta agreed with its majority shareholder Michael Tojner and the banks on a far-reaching restructuring. The native of Upper Austria injected 50 million euros as part of a capital increase, and the banks granted easier credit conditions and extended the contracts. The steps were intended to stabilize the company financially. But in view of the latest developments, Varta needs support again.
The lenders are now supposed to keep quiet until the summer until the expert AuxilPartner has revised the existing restructuring report. A corresponding standstill agreement is “in the signing process”. Varta expects the new report to be available by the middle of the year. It should be the basis for further renovation steps.
