After a long struggle to find new financing, the Swedish battery manufacturer Northvolt has filed for bankruptcy protection under Chapter 11 of the American bankruptcy code. As the company announced on Thursday evening, this will enable it to “restructure its debts, adapt the business based on current customer needs and create growth prospects.” At the same time, new funds will be made available to Northvolt. Truck manufacturer Scania, a subsidiary of the Volkswagen Group, will provide $100 million in the form of a special loan that US companies can use during bankruptcy proceedings. In addition, Northvolt will receive access to an additional approximately $145 million from lenders, the press release continues. Scania purchases battery cells from Northvolt. The parent company VW has a stake of more than 20 percent in Northvolt, making it the largest shareholder ahead of the American investment bank Goldman Sachs. In addition, a number of Swedish and global funds are involved in the start-up, which has long been considered the EU’s hope for the construction of battery cells , but has been struggling with significant problems for a long time. Insolvency proceedings over the branch in the USA Due to a loss of orders and difficulties in ramping up production, the group had recently scaled back its expansion plans, laid off thousands of employees and sold subsidiaries. The company can apply for restructuring proceedings under Chapter 11 of US bankruptcy law because it has a branch in America. It protects Northvolt from access by its creditors for a certain period of time and is intended to make the financial restart easier. The problems also have an impact on northern Germany, where Northvolt wants to build a large factory in Heide, Schleswig-Holstein. Northvolt Germany, the responsible company in Germany, is financed independently of the parent company, the company said on Thursday evening. It is not part of the Chapter 11 process, the construction near Heide “is and remains a strategic cornerstone of Northvolt.” No subsidies claimed yet None of the subsidies promised by Germany have been claimed yet, and that is not planned for that long the restructuring of the parent company is ongoing. Due to the difficult market environment, Northvolt plans to begin the first cell assembly at the Heide site in the second half of 2027 and then start the factory ramp-up. The first cell assembly was originally planned for the end of 2026. Northvolt was promised funding of around 900 million euros by the federal government and the state of Schleswig-Holstein for the construction of the planned 4.5 billion euro battery cell factory in Heide. In its home country of Sweden, 5.2 billion euros have been invested so far and state support of around 70 million euros has been received. Savings program has had little effect. Northvolt boss Peter Carlsson recently estimated Northvolt’s further long-term financial needs at more than 900 million dollars. Since 2016, the company says it has received a total of $10 billion in equity and debt capital from investors. Just at the beginning of the year, Northvolt took out a $5 billion loan via a bond. In 2023, Northvolt’s annual loss before taxes has almost quadrupled to around $1.2 billion. The crisis has become increasingly acute since the summer. To reduce costs, Northvolt announced a restructuring plan in September. Among other things, 1,600 jobs were cut and various expansion projects were put on hold. A subsidiary in Sweden filed for bankruptcy. Northvolt now wants to concentrate on ramping up the still stagnant production in its first battery cell factory in Skellefteå, northern Sweden. Problems with the production processNorthvolt has long been considered a great hope for Europe’s technological catch-up in battery cell production. The battery is by far the most expensive component of electric cars, but so far the European car industry is almost entirely dependent on suppliers from China and other Asian countries. The Chinese global market leader CATL alone supplies around a third of all electricity storage for electric cars in the world. Northvolt is the first European company to have built a large battery cell factory. The Skellefteå factory began operations in December 2021. To date, Northvolt has not gotten the technically complex production process under control. In its first expansion stage, the “Gigafactory” in Sweden has an annual production capacity of 16 gigawatt hours, enough to produce electricity storage devices for around 230,000 electric cars per year. More on the topic But the factory still only achieves a small fraction of its capacity and produces many faulty battery cells. The first customers have now lost patience: BMW canceled a major order worth billions from Northvolt in June. Audi and Porsche, among others, have also ordered battery cells from the Swedes.
Go to Source