Who Would Have 1 Billion to Save the European Battery Champion?
This page is translated from the original post "Qui aurait 1 milliard pour sauver le champion européen de la batterie ?" in French.
- 22/11/2024 15:00
The beautiful story ends in the saddest way. The Swedish startup Northvolt has declared bankruptcy.
Until recently, Northvolt was considered a leading player in European efforts to build an electric vehicle battery industry capable of competing with Chinese giants. The company had set up a factory in northern Sweden to achieve this, aiming to use green energy to produce hundreds of thousands of batteries each year. However, signals turned from green to red in recent months, and the company has fallen into crisis due to a lack of liquidity to complete the construction of this factory and operate it properly.
Northvolt logically announced this week that it is seeking protection under Chapter 11 of the US Bankruptcy Code following the failure of negotiations with investors. This process is comparable in France to a safeguard procedure. It is therefore not strictly a bankruptcy proceeding, as the company’s assets are not frozen. It can continue its activities while seeking a rescue solution. But for a rescue to happen, fresh capital is needed, and we’re talking about not just a few hundred thousand dollars but indeed between 1 and 1.2 billion! According to documents shared with US authorities, the company has about 30 million dollars in cash to cover… 5.8 billion dollars in debt!
The main blow came from losing the contract with BMW, frightened by the announced delays. The German automaker had agreed to go along in hopes that Northvolt would reduce its dependence on Asian suppliers, but certainly not at the cost of delays in producing its new models based on the Neue Klasse platform. The Swedish truck manufacturer Scania, a shareholder and the largest customer, announced it would loan Northvolt 100 million dollars to support its restart. The Swedish government also appears willing to lend a hand, but with the condition that Northvolt refocuses its activities within Scandinavia and abandons its expansion plans in Germany and the United States. When the world shrinks to Sweden…
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