VARTA AG Announces Restructuring Concept Update Amid Challenges

VARTA AG, a key player in the energy storage sector, has declared an update to its restructuring concept originally set into motion in July 2023. This development emerges in response to unforeseen economic pressures and operational setbacks, including a significant cyberattack impeding the company's production capabilities for weeks. The holistic reassessment aims to align with the company's strategic objective of returning to profitable growth by the end of 2026.

The necessity for revisiting the restructuring strategy springs from a combination of deteriorating economic conditions affecting VARTA's diverse business operations, fluctuating customer demand, especially for small-format lithium-ion cells, a sharp decline in the demand for energy storage solutions, an aggressive competitive landscape, and persistent supply chain disruptions. Moreover, the recent cyberattack's ramifications have further strained the company's financial outlook, complicating the assessment of its operational and financial aftermath.

VARTA is cooperating with AuxilPartner, roped in as the new restructuring expert, to update the existing restructuring blueprint and adapt to the present challenges. This strategic pivot is supported by the financing parties through a standstill agreement, aimed at facilitating the necessary adjustments under the current restructuring and financing framework. Despite the uncertainty surrounding the exact modifications to the restructuring plan, VARTA is optimistic about securing an updated outlook by mid-2024.

Moreover, VARTA has enlisted the expertise of Rothschild & Co., among others, as financial advisors to explore strategic alternatives for recapitalization and financing. With a collaborative approach engaging financing stakeholders, VARTA's executive board anticipates forging a sustainable path forward through comprehensive restructuring measures.