European climate tech poster child Northvolt is filing for Chapter 11 bankruptcy in the US after months of trying to secure fresh capital from investors.
The Swedish company, Europe’s best-capitalised battery manufacturer, will now undergo a reconstruction process, during which operations will continue as normal, according to a press release issued Thursday. One of its customers — vehicle manufacturer Scania — has committed $100m to the company as part of the process.
The restructuring is expected to be completed in the first quarter of 2025, Northvolt said in the press release. As part of this process, it will aim to raise fresh capital from strategic and financial investors.
Tom Johnstone, the company’s interim chair, stated: “This decisive step will allow Northvolt to continue its mission to establish a homegrown, European industrial base for battery production.”
The Chapter 11 restructuring will allow Northvolt to access $145m in cash, in addition to the $100m in financing from Scania. Northvolt’s subsidiaries, Northvolt Germany and Northvolt North America, are financed separately and will continue operating as usual outside of the restructuring process.
The news comes after a tough year for the company during which it has struggled to scale up battery production and saw one of its shareholders, car maker BMW, pull a multi-billion euro contract.
Following BMW’s withdrawal, Northvolt underwent a strategic review, resulting in approximately 1,500 job cuts and the closure or sale of several factories.
Swedish union IF Metall, which has around 2,000 employees at Northvolt, has criticised the company’s decision to file for bankruptcy in the US, arguing that employees may not receive the same benefits and pay as they would under Swedish bankruptcy laws.
Earlier this week, Northvolt’s CEO and cofounder, Peter Carlsson, stepped down as chairman of Northvolt Ett, the company’s flagship factory in Skellefteå, northern Sweden. He was replaced by Paul O'Donnell, an expert in corporate restructuring.
Since being founded in 2015, Northvolt has raised €15bn in debt and equity. Its largest stakeholders include car manufacturer Volkswagen, investment bank Goldman Sachs, and Vargas, the investment company of Harald Mix.
