Possible Breakup: Battery Manufacturer Varta Files for Insolvency
Another insolvency proceeding is beginning for the embattled battery manufacturer Varta. The company confirmed four insolvency filings. A breakup of the company now looms.
German battery manufacturer Varta has, according to its own statements, filed for preliminary insolvency under self-administration. The aim of this step is to secure the company's economic future and enable a sustainable continuation of business operations.
A total of four insolvency filings are involved. This was confirmed by a spokesperson for the Stuttgart District Court. According to company statements, in addition to Varta AG as the parent company headquartered in Ellwangen (Baden-Württemberg), the operational units Varta Microbattery GmbH, Varta Micro Production GmbH and Varta Storage GmbH are also affected by the filings.
Owners Unwilling to Provide New Capital
According to information from the news agency Reuters, this step had already been foreseeable. The current owners — sports car manufacturer Porsche and Austrian entrepreneur Michael Tojner — are reportedly unwilling to provide additional capital.
According to creditors, an assessment by restructuring experts from the consulting firm FTI concluded that Varta would have needed a cash injection in the mid double-digit millions range to continue operating. "Despite intensive discussions, no commitment to provide the required additional funds has been received from any party," a spokesperson for the creditors stated last Wednesday.
Breakup of the Company Looms
It became known on Thursday that key creditors want to split up the group. The so-called ad hoc creditor group, led by Deutsche Bank along with financial investors RBC BlueBay, Blantyre and Whitebox, is planning to separate the profitable household battery business from the Varta group.
The creditors justify their approach by citing the strained financial situation. They say they currently see no fundable solution for the group as a whole.
According to Reuters, Michael Tojner has expressed interest in the microbattery business, which includes batteries for hearing aids. For the remaining business divisions, a further restructuring step is therefore likely to become necessary.
State Government Wants to Protect Jobs
Baden-Württemberg's Economics Minister Nicole Hoffmeister-Kraut announced that she would continue to work toward preserving as many jobs as possible. "I have conducted intensive talks with all parties involved over the past days and weeks and will continue to do so," the CDU politician stated.
The goal is to "preserve as much industrial value creation, technological expertise and as many jobs in the state as possible." However, the decision about the company's future ultimately rests with the owners, investors and creditors. The looming breakup is not good news — "neither for the employees nor for Baden-Württemberg as an industrial location."
More Than 3,000 Employees
The battery manufacturer, headquartered in Ellwangen, Baden-Württemberg, employs approximately 3,260 people according to its own figures. In addition to household batteries, the company produces microbatteries for hearing aids as well as energy storage systems.
Varta last published its financial figures in 2024. At that time, the company achieved revenues of around 793 million euros and a loss of nearly 65 million euros.
Restructuring was meant to prevent insolvency
In 2024, Varta had restructured under the German restructuring act (StaRUG) in order to avert insolvency. Existing shareholders lost their stakes in the process, while creditors waived a portion of their claims. At the beginning of April of last year, Varta declared the restructuring complete and considered itself back on track.
However, the economic situation deteriorated once again. A plant with around 350 employees in Nördlingen, Bavaria, is set to close as early as this autumn.
Varta had lost its most important customer in the spring: Apple intends to source the rechargeable button cells for its AirPods headphones from China in the future.
