Northvolt Battery Files For Reorganization in The US
Gigafabrikken Northvolt i januar 2024. I dag jobber det om lag 3000 personer ved batterifabrikken i Skellefteå i Nord-Sverige. 300 av disse kan miste jobben etter Northvolts varsel om nedbemanning. (Foto: Northvolt).
To avoid bankruptcy, the troubled battery manufacturer Northvolt is filing for reorganization and bankruptcy protection in the US, in a so-called Chapter 11 process.In addition, CEO and founder Peter Carlsson is stepping down with immediate effect.
As a result, business will continue as usual and the company will fulfil its obligations to customers, suppliers and employees, according to the North Sweden Business.
The Chapter 11 process means that the company will have access to USD 145 million (SEK 1.6 billion) from a security package and USD 100 million (SEK 1.1 billion) in loans from Scania, one of Northvolt's largest customers.
The process will allow the company to restructure its debt, align its business with current customer needs and secure a sustainable foundation for continued operations.
Avoids bankruptcy
The Chapter 11 process applies to Northvolt Ett, the battery factory in Skellefteå, and Northvolt Labs in Västerås. Its commencement now means that employees will receive their salaries as usual next week.
The filing for reorganization in the US means that Northvolt avoids the threat of bankruptcy. In recent weeks, the situation has become increasingly critical for Northvolt.
It has failed to raise new capital and it has major problems in battery production, which is still at a low level, far behind schedule.
Will allow us to capture the continued market demand for vehicle electrification
Will continue the mission
Tom Johnstone, interim Chairman of the Board, commented in a pressrelease that "This decisive step will allow Northvolt to continue its mission to establish a homegrown, European industrial base for battery production."
"Despite near-term challenges, this action to strengthen our capital structure will allow us to capture the continued market demand for vehicle electrification. We are likewise pleased by the strong support we have received from our existing lenders and our customers.”
As part of the restructuring process, which is anticipated to be completed in the first quarter of 2025, Northvolt will evaluate proposals for new money investment.
Steps down
As part of the prosess, founder of Northvolt, Peter Carlsson steps aside as CEO of Northvolt. Carlsson will remain as Member of the Board and as Senior Advisor. Carlsson has led Northvolt since its he co-founded the company in 2016.
“Today marks a significant new phase for Northvolt as well as for me personally. The Chapter 11 filing allows a period during which the company can be reorganized, ramp up operations while honoring customer and supplier commitments, and ultimately position itself for the long-term. That makes it a good time for me to hand over to the next generation of leaders", the founder said.
The changes of leadership take place with immediate effect.
