Swedish battery developer and manufacturer Northvolt has filed for bankruptcy in the United States after failing to secure bailout funding, having only one week of cash left and struggling with mounting debt.
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Northvolt AB, a Swedish battery cell manufacturer that produces battery cells for electric vehicles (EVs), announced that it has filed for Chapter 11 bankruptcy protection in the United States.
This is seen as a major blow to Europe’s domestic electric vehicle industry, as the company was the continent’s most developed battery maker.
Northvolt AB manufactures lithium-ion, lithium metal and sodium-ion batteries, especially for e-mobility and energy storage. The company’s flagship battery gigafactory, Northvolt Ett, is located in Skellefteå, Sweden.
The move comes as the battery maker struggles to secure bailout funds, leaving the company with only one week’s worth of cash remaining, up to around $30 million (€28.81 million). . In contrast, Northvolt AB’s debt amounted to approximately $5.84 billion (€5.61 billion).
Since the bankruptcy filing is a voluntary reorganization, the company will be able to raise new financing worth approximately $245 million (€234.34 million).
These new funds will be split into two parts. The first part is a debtor loan of approximately $100 million (€95.79 million), which is a special type of funding available to companies that choose to reorganize through Chapter 11.
The second part is approximately $145 million (€138.89 million) in cash collateral provided by Northvolt’s current customers.
The move will also enable the company to expand as needed to best meet current market demands and form a solid foundation for long-term business. In the long term, this decision is expected to help Northvolt build a domestic battery production base.
The company says it will continue to operate as usual during the restructuring process. This includes paying employees as usual, obligations to key vendors, and deliveries to customers.
Northvolt Labs and Northvolt Ett in Västerås, Sweden, together with Northvolt AB’s subsidiaries Northvolt North America and Northvolt Germany, will continue to function as normal.
Northvolt CEO Peter Carlson has announced that he is resigning following the company’s bankruptcy filing.
Bankruptcy filing expected to help build Northvolt’s European industrial base
Tom Johnston, interim chairman of the board, said in a statement on the company’s website: “This decisive step enables Northvolt to continue its mission of establishing a homegrown European industrial base for battery production.”Despite short-term challenges, this initiative strengthens the company’s capital structure. This will enable us to capture the continued market demand for vehicle electrification. ”
He added: “Through this process, we remain focused on delivering on our commitments to our stakeholders, including our employees, customers, suppliers and the governments of the countries in which we operate.
“As a restructured organization, we aim to establish a strong business foundation and competitive platform for innovation and long-term growth that will advance our efforts towards building a more sustainable society. Masu.”
