Dive Brief:
- Porsche plans to become the majority owner of V4Drive and aid in the financial reorganization of its parent company Varta, according to an Aug. 17 press release.
- The battery manufacturer produces large-format lithium-ion round cells, which are used in the hybrid Porsche 911 Carrera GTS.
- Porsche’s expected 30 million euros investment would directly benefit Varta, which needs a “stable financial basis” to remain the minority stakeholder in V4Drive.
Dive Insight:
Varta is in the midst of a “debt haircut” after its investments in promising business models fell “well short of expectations,” according to its website.
“As a result, earnings have recently not been sufficient to achieve a sustainable positive operating result that is commensurate with the current debt burden and financial resources,” the company told investors.
The battery manufacturer hopes to cut its debt from 485 million euros to 200 million euros, per an Aug. 17 press release. To improve liquidity, it has secured 100 million euros from a capital increase enabled by the Porsche deal, as well as a senior secured loan.
“Despite the current economic challenges, the company offers great potential to make Europe's battery cell research and production less dependent on Asian suppliers,” said Dr. Michael Tojner, chairman of Varta’s supervisory board and majority shareholder, in the release. “Together with Porsche, we want to make a contribution to this.
“With today's agreement, we have together taken an important first step that secures the stability of VARTA AG and paves the way for a new start."
Porsche is advancing V4Drive’s production facility for booster cells in Nördlingen, Germany, which is expected to begin production in 2025.
“With the planned majority takeover of V4Drive, we aim to drive the company forward and would make an important contribution to keeping key technologies in Germany,” said Lutz Meschke, finance and IT executive board member at Porsche, in the automaker’s release.
The luxury automaker’s majority takeover of V4Drive is subject to antitrust approvals in various countries and the successful implementation of the financial restructuring of Varta. The release did not specify when the deal is expected to close.
