STOCKHOLM (Reuters) – Northvolt, the Swedish maker of battery cells for electric vehicles, may be close to filing for bankruptcy in Sweden, Swedish newspaper Dagens Nyheter (DN) reported on Tuesday.
Northvolt sought U.S. Chapter 11 bankruptcy protection in November last year as its cash pile dwindled, trying to secure funds that would allow it to fix persistent problems in scaling up output at its flagship plant in northern Sweden.
Citing two sources, DN reported that Northvolt’s board would file for bankruptcy on Wednesday for “the entire Swedish business” if the company fails to raise new funding by then.
Northvolt’s board is expected to make a definitive decision about the company’s future Tuesday evening or early Wednesday, DN reported.
Northvolt declined to comment.
Once the court approves a bankruptcy application it appoints a trustee to take charge of the company and divide assets to creditors. Operations are shut down and while the trustee can still try to find a buyer for the company, management loses all control of the decisions.
Swedish business daily DI also reported on Tuesday that “people close to the involved players” fear Northvolt is “getting close to a bankruptcy”.
Europe had hoped that Northvolt would reduce Western car makers’ reliance on Chinese rivals such as battery maker CATL and EV and battery maker BYD.
The company, whose motto was “make oil history”, 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.
However, its former CEO Peter Carlsson, who stepped down shortly after the company’s Chapter 11 filing in November, said at the time of his departure that the company needed up to $1.2 billion to restore its business.
Northvolt early last year clinched a $5 billion green loan deal with a group of lenders, intended to pay for a large plant expansion, but the funding was later cancelled as the company’s problems mounted.
At the end of January, Northvolt’s debt stood at more than $8 billion, previously released documents showed.
(Reporting by Marie Mannes, Anna Ringstrom and Johan Ahlander; Editing by Matt Scuffham and Nia Williams)
