(new: analyst opinion, updated share price reaction)

ELLWANGEN (dpa-AFX) - The struggling battery group Varta is once again calling on its backers for help. A slump in demand, cheap offers from competitors in Asia and a cyber attack are setting the company back in its restructuring. The concept from last summer is "no longer adequate" to return to profitable growth by the end of 2026 as planned, Varta announced on Thursday evening in Ellwangen. The Management Board is negotiating a solution with the financiers. The Varta share price plummeted following the news.

Shortly after the start of trading on Friday, the share lost up to 34 percent to 9.30 euros, falling to its lowest level since the 2017 stock market flotation. In the early afternoon, the share was still down by almost 29 percent, making it the biggest loser in the small-cap index SDax. So far this year, the share has lost more than half of its value, and in the past five years it has even lost around three quarters.

According to the information provided, Varta's crisis has worsened across the board. Demand for small lithium-ion button cells for headphones, for example, has fluctuated greatly, and demand for energy storage systems for electricity from solar power plants has unexpectedly dropped "considerably". The Group also complained about low prices from competitors for energy storage systems and ongoing problems in the supply chains.

To make matters worse, hackers attacked Varta's computer systems in February and paralyzed production for several weeks. The economic consequences of the cyber attack could not yet be fully assessed, it was said. As a result, the company has already had to postpone the presentation of its consolidated financial statements for the past year until after April 30. The company is therefore also likely to be dropped from the SDax.

For industry expert Thomas Wissler from MWB Research, Varta is primarily under pressure due to the aggressive pricing policy of Chinese competitors. In addition, the Group's high level of debt limits the management's room for maneuver. Varta must significantly reduce costs, make sales prices competitive and present innovative products in order to achieve a lasting turnaround. Profits are therefore likely to come under further pressure before things improve.

The analyst sees little reason for hope for Varta shares for the time being. He lowered his price target from 16 to 7 euros and continues to advise investors to sell their shares.

Varta had reached an agreement with its majority shareholder Michael Tojner and the banks on a far-reaching restructuring in 2023. The Austrian Tojner had injected 50 million euros as part of a capital increase, and the banks granted easier credit terms and extended the contracts. These steps were intended to stabilize the company financially. But in view of the latest developments, Varta needs support again.

The lenders are now to remain silent until the summer until the expert AuxilPartner has revised the existing restructuring report. A corresponding standstill agreement is "in the process of being signed". Varta expects the new expert opinion to be available by the middle of the year. It will form the basis for further restructuring steps.

In the meantime, Varta has engaged the investment bank Rothschild & Co. as a further advisor. It is to work out options for further capital measures and financing steps. It is not yet possible to make any reliable statements about the specific adjustments, restructuring and financing measures, it was added./stw/nas/ngu