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NorthVolt is filing for Chapter 11 bankruptcy after Europe’s best-funded startup and its main hope to challenge Asian dominance in electric vehicle batteries failed to agree a last-minute rescue package with investors. stayed
The Swedish group said Thursday night that it is filing for Chapter 11 reorganization in the U.S. — an option for companies with operations overseas — and will continue to operate as usual in the meantime.
“This decisive step will allow NorthVolt to continue its mission to establish a domestic, European industrial base for battery production,” said NorthVolt Interim Chair Tom Johnstone.
NorthVolt was considered crucial to Europe’s automotive industry and was seen as the best chance to compete against companies such as China’s CATL and BYD, Japan’s Panasonic, and South Korea’s LG and Samsung in EV battery production. .
But the Swedish group, which has raised more than $15 billion from investors such as Volkswagen, Goldman Sachs and BlackRock, as well as the German and Canadian governments, has struggled to ramp up production at one of its factories in Skalfatia in northern Sweden. is
NorthVolt said it would be able to access $145mn in cash as part of the Chapter 11 process and $100mn in new financing from one of its customers – truck maker Scania.
It added that its German and Canadian businesses, which aim to build factories in each country, would continue to operate as normal because they had received separate financing, including about 4 billion from the respective governments. through dollar subsidies.
NorthVolt, which said it expects the restructuring to be completed in the first quarter of next year, aims to raise fresh capital from strategic and financial investors.
“Throughout this process, we will focus on delivering on our commitments to our stakeholders, including our employees, customers, suppliers and the governments of the countries in which we operate,” Johnstone said.
Current and former Northvolt employees have previously blamed everything from mismanagement and overspending to poor safety standards and heavy reliance on Chinese machinery for the group’s failure to increase production.
Its sub-Arctic factory had the capacity to make 16 gigawatt-hours of batteries a year, enough to power about 270,000 cars, but produced less than 1 percent of that last year, according to insiders. Who was
Last year, an employee was killed in an explosion at the factory – Swedish prosecutors are preparing to charge him with a notice of “suspicion of mass murder”. Another shareholder, BMW, has also canceled a $2bn contract due to non-production of batteries.
NorthVault’s plan, which was announced earlier this year, has been repeatedly pitched to raise $7 billion in fresh capital, but the deal fell apart this month with investors for $300 million. appears to be close to agreeing on an aid package.
It has discussed options in recent days, including declaring bankruptcy as well as seeking short-term financing, but has filed for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas. decided to file for
NorthVolt is being advised by Taneau, Kirkland & Ellis, A&O Sherman, and Mannheimer Swartling. Rothschild is running its own marketing process.
