German battery maker Varta has filed applications for insolvency as part of plans for the long-term restructuring of the troubled company.

Varta said it filed the self-administration applications in Stuttgart on July 23 and told employees the following day — citing “significantly deteriorated market conditions, weaker demand and negative exchange rate effects”.

A recent decision by a key customer to end cooperation was also a contributing factor, Varta said.

In addition to the parent company (Varta AG) the operating units Varta Microbattery in Ellwangen, Varta Micro Production in Nördlingen and Varta Storage are affected.

Preliminary insolvency proceedings in self-administration have also been launched for Varta Microbattery.

The Varta Consumer Batteries business unit and its associated companies, which are legally and operationally separate and financially independent, are expressly excluded from the applications.

Varta said its existing group structures and complex internal inter-dependencies had made it difficult to effectively implement necessary restructuring measures and require additional liquidity.

This led to a “structural financing gap” at the level of the parent company, against a background of an ongoing restructuring review, especially with regard to the further development of the company from 2027.

The Stuttgart District Court has appointed Tobias Wahl, of the German law firm Anchor, as provisional administrator — with the aim of securing the economic future of the company and the sustainable continuation of business operations.

Varta CEO Michael Ostermann said the court move was an unavoidable step despite earlier restructuring efforts.

“Varta has had to contend with major challenges in recent quarters. We on the board of management and the executive board are aware of the overall responsibility for employees, customers, suppliers and financiers and are working with all our might to preserve as many jobs as possible, to enable sustainable continuation and to create the best possible prospects for all stakeholders.”

Ostermann said the market for energy storage systems continues to be an industry of the future that needs strong domestic suppliers and technology leaders such as Varta.

The insolvency move comes just over a year after Varta unveiled a multi-million-euro liquidity boost in the latest steps of a restructuring plan to “guarantee” battery tech production and research in Europe.

Earlier this year, Ostermann discussed his plans for Varta’s future with Batteries International editor Shona Sibary. He said then it had been a “challenging year”, adding: “As you can imagine, we’ve been having seven-day-a-week negotiations with lenders. The very first priority for me was to get the financial situation stabilised.

“We have become a little bit too fat in recent years. We had way too many overheads, and we are now doing some operational restructuring by making the organisation and our processes slimmer to be able to make faster decisions, because this has sometimes been too slow.”

Read that exclusive interview here.