Swedish gigafactory maker Northvolt filed for Chapter 11 bankruptcy in the US on Thursday after months of urgently hunting for a cash lifeline. As it looks to restructure, there’s a lot of money on the line: Northvolt has raised $13bn in debt and equity and owes creditors $5.8bn.
The company, which was founded in 2016, had struggled to meet production targets, culminating in car maker BMW canceling a billion dollar battery cell order from the company in June.
Northvolt then underwent a strategic review of its operations, laying off staff and cutting overheads by focusing on its flagship factory in northern Sweden. Having struggled in its hunt for further capital, Northvolt filed for Chapter 11 bankruptcy in the US.
Chapter 11 will allow Northvolt to restructure its debt and operations, as well as seek new funding to keep the company going long term. Northvolt’s CEO Peter Carlsson resigned on Friday, leaving CFO Pia Aaltonen-Forsell, COO Matthias Arleth and restructuring officer Scott Millar to lead the process.
If a current shareholder, or new financier, stumps up the new funding, they’d likely take ownership of the business. Companies emerge from Chapter 11 with fundamentally different ownership — so which existing shareholders stand to lose the most?
The existing cap table
Northvolt has raised over $13bn in debt and equity over its lifetime.
Its largest shareholder is German car manufacturer Volkswagen. Volkswagen invested about €900m into Northvolt in June 2019 to acquire a 20% stake and take a board seat. It doubled down in November that year with another €500m cash injection, retaining its 20% stake.
Northvolt’s next largest shareholder is asset manager Goldman Sachs — though it's unclear how much it has put into the company in total. It entered the cap table in 2019 at the same time as VW.
In 2021, Goldman backed the company again as part of a mammoth $2.8bn equity raise alongside investment manager Baillie Gifford, truck maker Scania, Canadian pension fund OMERS and a host of other investors. Goldman currently has a 19% stake in Northvolt.
Northvolt’s next largest shareholder is Vargas, the company builder headed by Swedish financier Harald Mix, which seeded Northvolt with its first cash. Vargas is likely to have given Northvolt a much smaller amount than the rest of its largest shareholders, having entered the cap table so early on.
Other shareholders include Danish pension fund Arbejdsmarkedets Tillægspension, car maker BMW and the IMAS Foundation, which invests the wealth of the IKEA foundation.
Northvolt's creditors
When Northvolt filed for its Chapter 11 bankruptcy, the company had $5.8bn in debts — and a long list of creditors.
According to the filing, Volta Vision, a German company that tests and develops battery and automotive systems, is owed the most ($3.8bn) by Northvolt AB — Northvolt’s parent company.
German public bank KfW, which loaned Northvolt funding for the development of its flagship factory Northvolt Ett, is owed $695m. Volkswagen, its largest shareholder, is also owed $355m for a convertible loan.
Other companies owed money by Northvolt include contractors and vendors who work on the sites. SFA Engineering Corp, which provides turnkey factory equipment, is owed $30m, for example.
Chinese creditors
Notable on the list of creditors are Chinese companies Wuxi Lead and Easpring Technology. Wuxi Lead supplies manufacturing equipment to gigafactories, while Easpring sells cathode material for lithium-ion batteries.
Northvolt had billed itself as central to ending European reliance on Chinese production for batteries, but its list of creditors underscores that the Swedish company has ended up relying on equipment and materials from the Asian country. China dominates the battery market, supplying the majority of the world’s batteries and components.
Not exposed: the EU and the German state
Notable omissions from Northvolt’s list of creditors are many of the governments and public institutions which pledged funding to the company. Governments and public institutions have pledged the company more than €2.7bn over its lifetime.
Those include the European Investment Bank (EIB), which promised €943m. Earlier Sifted reporting showed the EIB’s stake was yet to be handed over because it was ring-fenced for the expansion of a factory which is yet to happen.
Northvolt was also promised €902m from the German state, a combination of €700m as a grant and €202m as loan guarantees. Sifted understands none of the €700m has been sent to Northvolt yet, and that the loan guarantee would only be triggered if the company defaults on payments — it’s not clear if it is yet to do so.
Canada is more exposed. Its Caisse de dépôt et placement du Québec (CDPQ) and Invest Québec, the Québec government’s investment arm, invested €134m and €181m respectively, as convertible notes.
Several Canadian pension funds are also invested in Northvolt’s parent company. The Investment Management Corporation of Ontario (IMCO), Canada Pension Plan Investment Board (CPP Investments) and CDPQ have collectively invested around $1.1bn into the battery maker, according to Reuters. Canadian public pension fund OMERS has also been a long-term backer of Northvolt.
Sweden, where Northvolt is headquartered, has invested far less into the company than countries like Germany and Canada. In total, through a variety of grants, Northvolt has received SEK 625m (€55m) in government money from Sweden.
The other Swedish public money invested in Northvolt comes from pension funds, several of which are on the battery maker’s cap table. AP-fonden, the Swedish public pension system's leader, has invested SEK 5.8bn (€513m) in equity and convertible notes in Northvolt via four subfunds (AP1-AP4), which collectively hold a 3.7% stake in the company.
The pension fund with the biggest share in Northvolt is the Danish pension fund ATP, which has invested DKK 2.3bn (€308m) and owns around 5.3% of the company.
