A big blow to the European market - Europe's largest EV battery manufacturer declares bankruptcy!
Swedish battery cell maker Northvolt AB, which makes batteries for electric vehicles (EVs), has announced that it has filed for Chapter 11 bankruptcy in the US. This is being seen as a significant blow to the domestic European electric vehicle industry, as the company was the continent's most developed battery maker. Northvolt AB manufactures lithium-ion, lithium-metal and sodium-ion cells for e-mobility and energy storage, among others. The company's main battery factory, Northvolt Ett, is located in Skellefteå, Sweden.
The move comes after the battery maker struggled to secure bailout funds, resulting in the company having just one week of cash left, which amounted to around $30m (€28.81m). In contrast, Northvolt AB's debt totaled around $5.84 billion (€5.61 billion). The bankruptcy filing will give the company access to about $245 million (€234.34 million) in new financing as it is a voluntary reorganization.
These new funds will be divided into two parts. The first tranche is about $100 million (€95.79 million) of debtor-in-possession financing, which is a special type of financing available to businesses that choose to restructure through Chapter 11. The second tranche is approximately $145 million (€138.89 million) in cash collateral, which a current customer of Northvolt is offering.
The move will also allow the company to scale its operations as needed to best meet current market demands, as well as form a strong foundation for long-term operations. In the long run, this decision is expected to help Northvolt build a domestic battery manufacturing base.
The company has said it will continue to operate as normal until the reorganization takes place. This includes paying employee wages as usual, along with payables to key vendors, as well as customer remittances. Northvolt Labs, located in Västerås, Sweden, as well as Northvolt Ett will continue to operate as normal, along with Northvolt AB subsidiaries Northvolt North America and Northvolt Germany. Northvolt CEO Peter Carlsson announced he would step down after filing for bankruptcy.
Tom Johnstone, interim chairman of the board, said in a statement on the company's website: “This crucial step will allow Northvolt to continue its mission to create a European industrial base for battery manufacturing. Despite the short-term challenges, this move to strengthen our capital structure will allow us to capture the continued market demand for vehicle electrification."
He added: “Throughout this process, we will focus on fulfilling our commitments to our stakeholders, including our employees, customers, suppliers and the governments of the countries in which we operate. "As a reorganized entity, we aim to create a resilient base of operations and a competitive platform for innovation and long-term growth that will advance our work to build a more sustainable society."
Poll
What options are being discussed for the new pension scheme? From bonuses to the increase in age and the public-private pillar
The Deputy Minister of Economy, Culture and Innovation, Olta Manjani, explained in the 'DATAROOM' show on SCAN the reason why for existing pensioners, it was......
The Greek government drafts the 2025 budget - It is expected to be voted on in the parliament on Sunday, December 15
The Greek government has submitted the 2025 draft budget for discussion in Parliament, which is expected to be approved on Sunday, December 15. This document......
More charging points are required for electric vehicles - The increase in imports has driven demand from institutions and not only
The rapid increase in the number of electric cars during 2024 has brought a great need for the development of the relevant infrastructure, including the......
The benefits of Albania's membership in SEPA - Experts: Positive step on the way to EU integration, tourists also benefit
Albania's official membership in SEPA, which is the single Euro payments area, translates into faster times and lower costs for transfers. According to the......
Businesses, how to choose an energy supplier - ERE has licensed 34 companies to provide the service, contract details
As the liberalized energy market will expand with 2,600 businesses connected to the 10 kV voltage, there are currently 34 entities that offer the supply......
Will Trump steal the EU's crypto crown?
The EU's much-vaunted new cryptocurrency laws will come into effect in a few weeks, but Brussels lawmakers are already wondering whether they will be lost to......
In September, 51.6% more foreign visitors/ Preferred mainly the central area. Natives, the south
In September 2024, the capacities of accommodation structures have marked a significant increase compared to the same period last year, reflecting a more......
Catastrophic floods in Spain - Cost of damage as much as 0.2% of GDP!
Catastrophic flooding in eastern Spain last month is likely to have a negative impact of 0.2 percentage point on gross domestic product in the fourth......
