(AOF) – German manufacturer of batteries and cells, Varta (-28.93% to 10.05 euros) falls heavily in Frankfurt, after having provided information on its restructuring plan which will be implemented at the end of the year 2026. Its board of directors has mandated Rothschild & Co. as financial advisor, to develop strategic options regarding potential recapitalization and financing measures. Aiming to return to profitable growth by the end of the restructuring period, the company is facing enormous difficulties.
She noted the volatility in customer anticipated purchasing volumes particularly in the area of small format lithium-ion cells, the significant and unexpected decline in consumer demand for energy storage solutions. This decline is due to high inventory levels in the retail sector.
Varta also faces aggressive pricing from its competitors and persistent supply chain problems.
In addition, the group was the victim of a cyberattack against part of its computer systems on February 13. Consequently, this led to a shutdown of its production for several weeks and a further deterioration of its financial situation.
“The operational and financial consequences of this cyberattack cannot yet be fully assessed. In particular, it led to the postponement of the publication of the company’s 2023 consolidated financial statements,” explains Varta.
The German company is currently evaluating the restructuring program which was agreed with the financing banks and the majority shareholder at the beginning of July 2023, based on an IDW S6 expertise prepared by a restructuring expert.
Companies experiencing financial difficulties in Germany are often asked by their lenders to submit a recovery expert report, in accordance with IDW S6. IDW S6 is a standard of the Institute of Auditors in Germany.
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