EU’s largest battery manufacturer goes bankrupt
22 November 15:56
The Swedish company Northvolt, which was supposed to become China’s main competitor in the European Union in the production of batteries for electric vehicles, has filed for bankruptcy. This was reported by Northvolt, according to Komersant ukrainskyi
“The company will continue to supply customers, while fulfilling its obligations to its most important suppliers and paying salaries to employees,” the statement said.
Northvolt has filed for bankruptcy in the United States under Chapter 11 of the U.S. Bankruptcy Code, which allows a company to reorganize its finances and submit a realistic plan to pay its creditors under court supervision. If the company fails to do so within the allotted time, the liquidation procedure is initiated.
“Importantly, this process will allow Northvolt to access new sources of funding, including approximately $145 million in cash collateral. In addition, one of Northvolt’s existing customers has committed to provide new financing in the amount of USD 100 million to support Northvolt’s business operations in the form of debtor-in-possession (DIP) financing, which is a specialized type of financing for companies in restructuring,” the statement said.
Northvolt had about $30 million in free cash, the statement said, and $5.84 billion in debt.
As part of the restructuring process, which is expected to be completed in the first quarter of 2025, Northvolt will evaluate proposals for new cash investments. This process will include engagement with both strategic and financial investors, as well as existing creditors, shareholders and customers.
Northvolt’s subsidiaries responsible for building planned plants in Germany and Canada remain outside the Chapter 11 process, although the company has said these projects will be delayed.
According to Bloomberg, Northvolt is one of the most heavily indebted companies to file for bankruptcy in the US this year. It is followed by Intrum AB, another Swedish company that filed a similar petition last week.
It is noted that Northvolt was supposed to become China’s main competitor in the European Union in the production of batteries for electric vehicles.
What is known about Northvolt
Northvolt is a Swedish battery developer and manufacturer specializing in lithium-ion technology for electric vehicles.
Northvolt was founded in 2016 in Stockholm, Sweden. The company was founded to supply the automotive industry with batteries for electric vehicles.
By developing an environmentally friendly model for battery production, the company has received orders from several leading automotive companies. Currently, the company supplies batteries from its first gigafactory, Northvolt Ett, in Söllefteå, Sweden, as well as from its research and development and industrial campus, Northvolt Labs, in Västerås, Sweden.
