Northvolt AB Files for Bankruptcy in Sweden
- Business Bankruptcy Companies World
Global Business Magazine- 5 minutes read
Following an exhaustive effort to explore all available means to secure a viable financial and operational future for the company, Northvolt AB, the Swedish battery developer and manufacturer, specialising in lithium-ion technology for electric vehicles, has announced that it has filed for bankruptcy in Sweden.
Following the filing, a Swedish court-appointed trustee will now oversee the process, including the sale of the business and its assets and settlement of outstanding obligations. The process will be conducted in accordance with Swedish insolvency law, with a focus on ensuring an orderly transition for employees, partners, and creditors. Northvolt has nominated Mikael Kubu as Trustee.
The entities Northvolt AB, Northvolt Ett AB, Northvolt Labs AB, Northvolt Revolt AB and Northvolt Systems AB filed with the Swedish court. However, Northvolt Germany and Northvolt North America are not filing for bankruptcy in their respective jurisdictions.
As wholly owned subsidiaries of Northvolt AB, any decisions regarding these entities will be made by the court-appointed trustee of Northvolt AB in consultation with the Group’s lenders at the appropriate time.
Like many companies in the battery sector, Northvolt has experienced a series of compounding challenges in recent months that eroded its financial position, including rising capital costs, geopolitical instability, subsequent supply chain disruptions, and shifts in market demand.
Furthermore, the company has faced significant internal challenges in its ramp-up of production, both in ways that were expected by engagement in what is a highly complex industry, and others which were unforeseen.
Despite pursuing all available options to negotiate and implement a financial restructuring, including a Chapter 11 restructuring process in the US, and despite liquidity support from our lenders and key counterparties, the company was unable to secure the necessary financial conditions to continue in its current form.
“The Board therefore determined that this is the only available solution while the company pursues all realistic options to obtain financing to continue operating during the Swedish bankruptcy process,” Northvolt said.
Tough Day
Northvolt’s Interim Chairman Tom Johnstone said that this was a difficult day for everyone at the company as it set out to build something ground-breaking to drive real change in the battery, EV and wider European industry and accelerate the transition to a green and sustainable future.
He said that the outcome was especially hard considering not only the level of engagement and interest we held with potential partners and investors in recent months, but also the clear improvement and upwards trajectory that we have been seeing in Northvolt’s production in Skellefteå, where cell output from serial production lines has doubled and we have secured a 50% improvement in production yield since September.
According to him, through the recent months, Northvolt has refocused its operations and reached several achievements. The company has ramped up production to meet customers’ needs, reduced operational cash outflow by 55%, made tough decisions to pause or delay expansion plans, completed divestitures and ultimately delivered our first one million battery cells to a European customer.
“We are hopeful that the outreach we have undertaken with potential investors during the Chapter 11 process will accelerate identifying the necessary financing to allow continued trading under the Swedish bankruptcy process,” he said and concluded that they were confident that the foundation, the technology, the expertise, and the commitment to sustainability — will continue to drive change in the industry.”
