Varta engages with Porsche over investment in lithium-ion battery unit
Adds background in paragraphs 3, 6 and 7; details from Varta's statement in paragraph 4
July 4 (Reuters) -German battery maker Varta VAR1.DE on Thursday said it is in talks with Porsche P911_p.DE over a potential investment in its large-format lithium-ion battery business, V4Drive.
The companies have signed a non-binding term sheet and are working on finalizing the details, Varta said, without disclosing any financial factors.
A Reuters request for comment sent to Porsche for more details went unanswered, late on Thursday.
Talks regarding an investment comes just a month after Varta cut its full-year revenue forecast for 2024. It now expectsfull-year revenue between 820 million euros ($886.50 million) and 870 million euros, compared with the previous forecast of at least 900 million euros.
The deal, which is contingent on a successful due diligence review and shareholder approval, would see Varta's V4Drive business transferred to a subsidiary, with luxury sportscar maker Porsche participating through a capital increase.
If approved, Porsche will have a majority shareholding in V4Drive Battery GmbH, a wholly-owned subsidiary of Varta.
Earlier this year, Varta said it may not meet targets set under its restructuring plan and was exploring recapitalization options. Under the plan, the troubled battery manufacturerexpected to return to "profitable growth" by the end of 2026.
Varta, which makes batteries for a range of uses including headphones, previously said its problems have been exacerbated by volatile customer orders, supply chain problems and a decline in demand for energy storage solutions.
($1 = 0.9250 euros)
Reporting by Surbhi Misra and Mrinmay Dey in Bengaluru; editing by Diane Craft and David Gregorio
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