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Northvolt’s fate is hanging in the balance as the troubled Swedish battery maker considers filing for Chapter 11 protection from creditors or even bankruptcy.
People involved in the negotiations about the future of the one-time big hope for Europe’s automotive industry said that its future was likely to be decided in the coming days after talks about a rescue package recently collapsed.
Northvolt is still trying to obtain a short-term financing deal to keep operating but is also considering other options such as Chapter 11 or bankruptcy as time is tight, according to the same people.
The Swedish group, which has raised more than $15bn in financing from the likes of Volkswagen, Goldman Sachs, Siemens and JPMorgan as well as subsidies from Canada and Germany, sought to become Europe’s answer to the dominance of Asian groups in the crucial battery technology needed for electric vehicles.
But Northvolt has struggled to boost production at its sub-Arctic factory in Skellefteå in northern Sweden and has faced a growing crisis since BMW pulled a $2bn contract earlier this year.
It has cut a quarter of jobs in Sweden and cut back work on a slew of projects to try to focus on increasing production in Skellefteå, which remains at just a fraction of the theoretical capacity of the factory.
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 putting more money into the lossmaking group.
“It is very fluid but at a certain stage you have to take a decision. Chapter 11 is possible, even bankruptcy is still an option,” said one person involved in the talks, who added that Northvolt still preferred a rescue package.
One of Northvolt’s main investors told the Financial Times that they thought an insolvency was likely next week and that they had written down the value of their investment to zero.
Northvolt said it declined to take part in speculation. “Since the beginning of the strategic review, we have constantly been discussing different options, and that hasn’t changed throughout the process. We will communicate results once we have found a conclusion, while we continue the dialogue with our stakeholders,” the company said.
Past and present workers have told the FT about a series of problems with the factory and Northvolt, from mismanagement and poor safety standards to problematic Chinese machinery and trying to do too much, too fast.
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