Sweden: Bankrupt scenario for Northvolt battery giant

The possibility to apply for protection from its creditors or even to examine the production giant Northvolt, whose future will probably be decided in the next few days. In particular, the Swedish battery building group is still trying to reach a short-term financing agreement to continue its operation, but it is also considering other options, such as chapter 11 or bankruptcy, as time is pressing, according to a Financial Times report. Northvolt, which has drawn more than $15 billion in funding from companies such as Volkswagen, Goldman Sachs, Siemens and JPMorgan, as well as subsidies from Canada and Germany, sought to make Europe’s response to the dominance of Asian groups in critical battery technology needed for electric vehicles. However, Northvolt has been struggling to boost production in its sub-artic factory in Skellefteå in northern Sweden and has been facing a growing crisis since BMW withdrew a $2 billion contract earlier this year. It has cut down a quarter of jobs in Sweden and has reduced work to a number of projects to try to focus on increasing production in Skellefteå, which remains a fraction of the plant’s theoretical capacity. Sweden’s centre-right government has consistently ruled out a state rescue of the company, while some of its private shareholders have expressed scepticism about making more money available to the loss-making group. “The situation is very fluid, but at a certain stage a decision must be made. Chapter 11 is possible, even bankruptcy is still an option,” said a person participating in the talks, which added that Northvolt still prefers a rescue package. One of Northvolt’s key investors told Financial Times that he considered bankruptcy possible next week and that he had zeroed the value of his investment. Northvolt said she refuses to participate in speculation. “Since the beginning of the strategic review, we have constantly been discussing various options and this has not changed throughout the process. We will announce the results once we come to a conclusion, while continuing the dialogue with our stakeholders,” the company said. Older and current workers have talked to the FTs about a number of problems with the factory and Northvolt, from mismanagement and bad safety standards to problematic Chinese machinery and the effort to make too much and too fast.