German battery maker Varta in 233 mln euro IPO to expand production

FRANKFURT (Reuters) - The German battery maker Varta said on Tuesday that it planned to raise up to 233 million euros in an initial public offering to fund an expansion of production.

Varta is pricing shares between 15 and 17.50 euros each. The share offer period begins on Wednesday and ends on Oct. 24, with shares expected to start trading on the Frankfurt stock exchange the next day.

Varta said that it plans to use 150 million euros of funds raised to expand production capacity, mainly in Germany.

The bulk of the funds will be used for the production of rechargeable lithium-ion microbatteries, and a smaller portion for producing zinc-air hearing aid microbatteries.

"Demand for our products is strong and our company's growth potential is high," Chief Executive Officer Herbert Schein said.

"That has given us a boost as we head toward the dialog with investors."

The company said it plans to sell new shares worth 150 million euros, as well as additional shares from its owner, Swiss investor Montana Tech Components.

Varta said it targeted a free float of about 38 percent​ if a an over-allotment option is fully exercised.

The price range corresponds to a market capitalisation of between 594 million euros and 668 million euros, Varta said.

It cancelled previous IPO plans last November, citing an unfavourable market environment.

Berenberg is advising on the IPO, along with Unicredit.

(Reporting by Tom Sims; Editing by Greg Mahlich and David Evans)