Northvolt, Europe’s battery champion, files for bankruptcy
Image courtesy Northvolt
Northvolt, the Swedish battery developer who was Europe’s largest hope for a battery champion, has filed for bankruptcy.
The Swedish battery technology company has been swimming in turbulent waters for some time now, marked recently by the bankruptcy of their subsidiary, Northvolt ETT Expansion AB.
Now, the parent company has voluntarily filed for Chapter 11 reorganisation in the US, enabling the company to restructure its debt and attempt to scale the business to current customer needs.
Northvolt had been hailed as Europe’s greatest hope for an independent supply chain of EVs and batteries, but strong competition from China, weak demand for European-made EVs and the company’s own production problems caused them to falter.
Have you read:
China’s EV rush: How record-breaking sales will impact global markets
Can automaker partnerships help utilities win EV customers?
Under the US Chapter 11 restructuring, which Northvolt cites as being distinct from a bankruptcy or administration proceeding in Sweden or other countries, the company will be allowed to operate as usual, while fulfilling obligations.
Importantly, the process will allow Northvolt to access new sources of funding, including approximately $145 million in cash collateral.
One of Northvolt’s existing customers has also committed to provide $100 million in new financing to support Northvolt’s business operations in the form of debtor-in-possession (DIP) financing, a specialised type of financing for businesses that are restructuring through a Chapter 11 process.
CEO steps aside
A day following the announcement of the filing, Northvolt CEO and founder Peter Carlsson, who has led the company since its inception in 2016, announced his stepping aside as the company’s CEO.
Carlsson will take on a role as senior advisor and remains a Member of the Board.
Commented Carlsson in a release: “Today marks a significant new phase for Northvolt as well as for me personally.
“The Chapter 11 filing allows a period during which the company can be reorganised, ramp up operations while honouring customer and supplier commitments, and ultimately position itself for the long-term.”
The company leadership will now consist of Pia Aaltonen-Forsell, chief financial officer, and Matthias Arleth, the president of Cells, who will now take the role of chief operations officer. Together, and supported by Scott Millar as chief restructuring officer, they will jointly lead Northvolt.
The search process for a new CEO has been initiated.
Northvolt Ett, the company’s flagship battery gigafactory in Skellefteå, Sweden, and Northvolt Labs in Västerås, Sweden will remain operational.
Northvolt Germany and Northvolt North America, subsidiaries of Northvolt AB with projects in Germany and Canada, are financed separately and will continue to operate as usual outside of the Chapter 11 process.
As part of the restructuring process, which is anticipated to be completed in the first quarter of 2025, Northvolt will evaluate proposals for new investment.
Northvolt is being advised by Teneo as its restructuring and communications advisor. Kirkland & Ellis LLP, A&O Shearman and Mannheimer Swartling Advokatbyrå AB are serving as legal counsel. The company has also engaged Rothschild & Co to run its marketing process.
