Misappropriation of the StaRUG – exhaustion of all legal means
- Alleged commercial agreement on the restructuring concept without the participation of the independent shareholders
- Significant information asymmetry among shareholders
- Negotiations with representatives of the company started
- Examination of liability and damages claims against bodies
- More than 3,000 VARTA shareholders fight for their shareholder rights
Munich, 05 September 2024 – In a message dated August 17, 2024, VARTA AG announced that it had reached a commercial agreement on the restructuring concept. The agreement provides for a reduction in the existing debt burden by a total of approximately EUR 285 million to approximately EUR 200 million by means of a debt haircut and an extension of the remaining loans until the end of December 2027. Furthermore, the complete reduction of the share capital to zero (which will lead to the expiration of the stock exchange listing) and a subsequent capital increase of EUR 60 million are planned. In addition, further, senior secured debt capital is to be made available by the existing financiers to cover the liquidity requirements.
Creditors who have agreed to a debt cut will share in the future success of the restructuring measures. However, this “agreement” was “achieved” without the participation of the free-float shareholders, who hold almost half of the equity. Only the majority shareholder DDr. Michael Tojner, who as Chairman of the Supervisory Board of Varta AG is (co-)responsible body of the company, will receive a good 30% of the increase in value of the company, which has been partially relieved of its debts in accordance with the StaRUG, for his current shareholding in the company, which is only 0.2% higher (50.1% according to the company website).
In addition, it is planned that DDr. Michael Tojner will only provide one third of the EUR 30 million capital increase allocated to him in cash, while the remaining EUR 20 million will be provided in the form of a contribution of real estate. Nothing is known so far about the appropriateness of the real estate valuation.
In addition to this blatant disregard for the principle of equal treatment, there is a significant information deficit among the independent shareholders. According to the company, the publication of the 2023 annual financial statements has been postponed several times due to a hacker attack. Major shareholder and supervisory board member DDr. Michael Tojner is likely to have at least a draft of the annual financial statements and is therefore familiar with them.
The aforementioned hacker attack, the missing annual financial statements and the unpublished quarterly reports must serve as arguments that a securities prospectus for the participation of free-float shareholders cannot be prepared in the short time available and that the shareholders are therefore excluded from the subscription right. In connection with this information asymmetry within the group of shareholders, the question also arises as to the extent to which insider-relevant facts are affected. This must be examined by the BAFin if necessary.
In an initial discussion with representatives of the company, the alliance of DSW (German Association for the Protection of Securities Ownership), the law firms Nieding+Barth and K&L Gates, and One Square informed VARTA’s advisory board that the free-float shareholders will exhaust all legal remedies to ensure equal treatment for all shareholders.
The subscription right, which VARTA is currently planning not to grant to minority shareholders, has a not insignificant value that still needs to be quantified, but is at least equal to the value of the debt relief per share and the expected increase in value from the restructuring of the company. Historically, the Varta share was quoted at its highest at € 181.30 on January 28, 2021, at its lowest at € 0.75 on August 19, 2024, and the current price is around € 1.70. On average, that is just under € 91.
In addition to the unequal treatment of shareholders and the insider trading issue with regard to the Chairman of the Supervisory Board, possible claims for damages are being intensively examined.
In the meantime, more than 3,000 Varta shareholders have registered and requested representation.
All shareholders can continue to contact us by email at varta@dsw-info.de or varta@onesquareadvisors.com Register by stating your name, address and shareholding and receive information on how to proceed and how to grant a power of attorney.
Contact:
One Square Advisors GmbH
E-mail: varta@onesquareadvisors.com
DSW – German Protection Association for Securities Ownership
E-mail: varta@dsw-info.de
Table of Contents
- 1 Misappropriation of the StaRUG – Exhaustion of All Legal Means: A Battle for VARTA Shareholders’ Rights
- 1.1 Alleged Commercial Agreement Without Shareholder Participation
- 1.2 Significant Information Asymmetry Among Shareholders
- 1.3 Negotiations with Company Representatives
- 1.4 Examination of Liability and Damages Claims
- 1.5 VARTA’s Stock: Historical Context and Current Status
- 1.6 Moving Forward: Actions and Contact Information
Munich, 05 September 2024 – VARTA AG, a renowned player in the energy storage sector, announced a controversial restructuring plan on August 17, 2024. This plan not only aims at reducing the company’s debt by approximately EUR 285 million but also proposes a drastic capital reduction to zero—resulting in the expiration of its stock exchange listing. The announcement has raised serious concerns over alleged misappropriations under the StaRUG (Restructuring Act) and the rights of independent shareholders.
Despite holding nearly half of VARTA’s equity, the independent shareholders were notably excluded from the recent negotiations regarding the restructuring concept. DDr. Michael Tojner, the majority shareholder, who holds only 50.1% of the shares, stands to gain a substantial benefit from the debt relief and planned capital increase. Critics argue that this commercial agreement was engineered without the necessary participation of free-float shareholders, violating the principles of fair treatment and transparency.
The situation has been exacerbated by a significant lack of transparency and information asymmetry among shareholders. Notably, VARTA postponed the publication of its 2023 annual financial statements multiple times, citing a hacker attack as the cause. This delay raises questions about the fairness of the process and whether DDr. Michael Tojner, by virtue of being a supervisory board member, possesses advance knowledge of financial documents that other shareholders do not.
This critical information deficit prevents free-float shareholders from adequately assessing their investment, thereby infringing upon their rights. The ongoing lack of clarity raises red flags, compelling stakeholders to question whether insider trading laws have been breached.
Negotiations with Company Representatives
In light of these troubling developments, representatives from the German Association for the Protection of Securities Ownership (DSW) and notable law firms such as Nieding+Barth and K&L Gates have engaged in discussions with VARTA’s advisory board. Their unified message? The free-float shareholders intend to exhaust all available legal remedies to assert their rights and demand fair treatment alongside their majoritarian counterparts.
Examination of Liability and Damages Claims
Scrutinizing this alleged misappropriation is vital. Discussions have begun surrounding potential liability and damages claims against VARTA’s management bodies, particularly focusing on actions that may have disregarded shareholder rights. With over 3,000 VARTA shareholders already registered for representation, the collective power of individual investors is becoming apparent.
In assessing liabilities, it’s essential to quantify the significance of the subscription right, which VARTA has planned to deny minority shareholders. This right not only holds substantial monetary value but is closely tied to the projected future success stemming from the restructuring efforts.
VARTA’s Stock: Historical Context and Current Status
Historically, VARTA shares have been on a rollercoaster ride, peaking at €181.30 on January 28, 2021, before plummeting to a mere €0.75 on August 19, 2024. The current trading price hovers around €1.70, significantly down from its historical highs. This stark decline underscores the need for transparency and equitable treatment among all shareholders, especially during such a pivotal restructuring phase.
Moving Forward: Actions and Contact Information
With the spirit of collective action guiding the path forward, shareholders are urged to remain engaged. They can register their participation via email for further updates on the unfolding situation. Interested parties can contact either:
the unfolding situation at VARTA AG serves as a cautionary tale regarding the importance of transparency, equal treatment, and the protection of shareholder rights. As the company embarks on a restructuring plan under the StaRUG, ensuring that the interests of all shareholders are represented will be crucial for restoring trust and fostering future growth. Shareholders must remain vigilant, unified, and proactive in their demands for justice and equitable treatment in navigating this tumultuous period.
