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And another climate change green company goes under.
"Europe's would-be battery champion Northvolt files for bankruptcy"
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https://www.msn.com/en-us/money/companies/europes-would-be-battery-champion-northvolt-files-for-bankruptcy/ar-AA1AMbfO>
'STOCKHOLM (Reuters) - Battery cell maker Northvolt has filed for
bankruptcy in Sweden, the company said on Wednesday, marking one of the country's largest corporate failures and effectively ending Europe's
best hope of developing a rival to challenge China.
FILE PHOTO: A view of the Northvolt Ett factory in Skelleftea, Sweden,
November 27, 2024. REUTERS/Marie Mannes/File Photo
FILE PHOTO: A view of the Northvolt Ett factory in Skelleftea, Sweden,
November 27, 2024. REUTERS/Marie Mannes/File Photo
© Thomson Reuters
"This was a decision we did not take lightly" and it was the only
"realistic path forward," Northvolt Chairman Tom Johnstone told a press conference, saying every avenue had been pursued to avoid bankruptcy for
the company, which puts 5,000 jobs at risk.
Northvault, the Swedish battery cell maker for electric vehicles, said
Current Time 0:01
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Duration 1:20
Reuters
Swedish battery maker Northvolt files for bankruptcy as cash runs out
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The EV battery maker sought U.S. Chapter 11 bankruptcy protection in
November as its cash pile dwindled and it scrambled to secure funds to
fix problems in boosting output at its flagship plant in northern
Sweden.
Its debt stood just over $8 billion across the Northvolt entities
entering bankruptcy, U.S. chapter 11 documents showed.
The bankruptcy is one of the biggest in Swedish corporate history and
the most high-profile since carmaker Saab Automobile more than a decade
ago.
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.
'A LOT GONE WRONG'
"It's obvious that a lot has gone wrong, and the price is now being paid
by our members," Marie Nilsson, leader of the IF Metall union said in a statement.
The Swedish company has received more than $10 billion in equity, debt
and public financing since its 2016 inception, and its biggest owners
include Volkswagen with a 21% stake, and Goldman Sachs, with 19%.
Northvolt's operations in North America and Germany were not filing for bankruptcy in their jurisdictions, the company said, and neither was its
Polish unit, an internal document showed.
German Economy Minister Robert Habeck said he hoped Northvolt might
still be rescued by an investor who could secure the future of its
planned German plant. "The possibility definitely exists," he said.
The bankruptcy will impact Northvolt's flagship plant in Skelleftea in
northern Sweden, where a green industry boom had created thousands of
jobs, many of which were now in jeopardy.
"It is important to emphasize that what is now affecting Skelleftea in
the short term will affect Sweden and Europe much more severely,"
Skelleftea Mayor Lorents Burman said, calling for government support to safeguard battery-making expertise.
Northvolt last year clinched a $5 billion green loan deal to expand a
plant, but funding was cancelled as its problems mounted, including
raising output at its Skelleftea factory.
Sweden's Deputy Prime Minister Ebba Busch said the government stood
ready to support Northvolt employees, and she hoped "the business will
be able to find a new long-term owner".
Porsche, which had supply contracts with Northvolt, said it had begun
searching for alternatives after news of the bankruptcy filing.
Volkswagen said it remained in contact with Northvolt but declined to
comment further on the bankruptcy.
Several shareholders have in recent months written down the value of
their Northvolt stakes to zero, while long-time partner Scania said it
had lined up a new supply of battery cells.
German carmaker BMW cancelled a $2 billion order in June after Northvolt
failed to deliver on a long-term contract.
LOSS FOR SWEDISH INDUSTRY
Co-founder Peter Carlsson, who stepped down as Northvolt CEO shortly
after the Chapter 11 filing in November, has said the company needed up
to $1.2 billion to restore its business.
"What ultimately forced the board to take this decision last night was
that it did not see a solution to the short term liquidity need,"
Carlsson told reporters on Wednesday.
Creditors include both private and public investors.
The bankruptcy was "a loss for Sweden's industry and social economy, and
above all for Skelleftea, Northvolt and its employees," said Jenny
Askfelt Ruud, who chairs 4 to 1 Investments which has invested 5.8
billion Swedish crowns ($578 million) in Northvolt shares and
convertibles.
A court-appointed trustee will oversee the bankruptcy process, which
will include the sale of Northvolt's assets and settling its outstanding obligations as far as possible'
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