“The company was unable to secure the necessary financial conditions to continue in its current form,” the group, which has over 5,000 employees, said in a statement.
At the end of January, its debt stood at more than $8 billion across the nine Northvolt entities in the Chapter 11 process, documents have shown.A court-appointed trustee will now oversee the bankruptcy process, which will include the sale of its assets and settling its outstanding obligations as far as possible.
The bankruptcy is one of the biggest in Swedish corporate history and the most high-profile one since that of now-defunct carmaker Saab Automobile more than a decade ago.
WORKERS ‘PAYING THE PRICE’
“When the acute phase of the work is done, there will be many questions about what transpired that will demand answers,” said Marie Nilsson, leader of the IF Metall union, which has about 1,800 members affected by the bankruptcy.
“It’s obvious that a lot has gone wrong, and the price is now being paid by our members,” she said in a statement.Northvolt’s operations in North America and Germany were not filing for bankruptcy in their jurisdictions and any decision regarding those units would be made by the trustee in consultation with lenders, the company said.
The company’s Polish entity was also not included in the bankruptcy filing, an internal document seen by Reuters showed.
Europe’s auto sector had hoped Northvolt would reduce Western carmakers’ reliance on Chinese rivals such as battery maker CATL and EV and battery maker BYD.
The company has received more than $10 billion in equity, debt and public financing since its 2016 inception, counting Volkswagen with a 21% stake, and Goldman Sachs, holding 19%, as its biggest owners.
Creditors include both private and public investors.
Northvolt early last year clinched a $5 billion green loan deal, intended to pay for a large plant expansion, but funding was later cancelled as its problems mounted.
German carmaker BMW cancelled a $2 billion order in June of last year as the battery maker failed to deliver on a long-term supply contract for battery cells signed in 2020.
Former Northvolt CEO Peter Carlsson, who stepped down shortly after the Chapter 11 filing in November, said at the time that the company needed up to $1.2 billion to restore its business.
Several owners have in recent months written down their stakes to zero while long-time partner Scania said this week it had lined up a new supply of battery cells in addition to the truckmaker’s deal with Northvolt.
