Porsche could take stake in battery maker Varta as part of major overhaul

By Alexander Hübner and Christoph Steitz

MUNICH (Reuters) -German battery maker Varta on Sunday said it is discussing two restructuring scenarios that could potentially lead to luxury sportscar maker Porsche taking a stake in it.

Varta said in a statement that the two scenarios included one with potential new investors, among them existing Austrian majority shareholder Michael Tojner and Porsche, as well as one with financial creditors.

Varta said it had decided to notify the relevant courts of an overhaul in accordance with Germany's corporate stabilization and restructuring act, adding that without such a move the firm would have to incur losses that would consume its share capital.

Varta, which has a market value of 440 million euros ($479 million), said earlier this month it was in talks with Porsche over a potential investment that could result in the carmaker becoming a majority owner of Varta's V4Drive business.

Sunday's statement, meanwhile, could see Porsche take a direct stake in Varta itself.

Porsche said it could confirm that it was in negotiations with a view to acquire a majority stake in V4Drive via a possible capital increase.

"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.

Varta said in April it might not meet targets set under its restructuring plan and was exploring recapitalisation options that should help it return to "profitable growth" by the end of 2026.

Varta said it hoped to quickly reach a decision on which of the two scenarios would be implemented, adding they covered debt capital or a combination of debt and equity in a high double-digit million euro amount to fund restructuring measures.

Varta said both proposals would result in a reduction of the group's share capital to zero, which would result in existing shareholders, except Tojner, leaving without compensation as well as a delisting of its shares.

"In addition, a significant debt haircut is planned for certain creditor groups and the deferral of remaining claims," Varta said.

It said it was unlikely that either proposal would garner the necessary majority at a general meeting of shareholders, adding the proposed restructuring, if accepted by courts, would allow it to realise it without investor approval.

($1 = 0.9194 euros)

(Reporting by Alexander Huebner and Christoph Steitz; Editing by Frances Kerry and Susan Fenton)