Arne O. Holm says When Green Initiatives Kick the Legs Out From Under Local Businesses

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As expected, TECO 2030, with its headquarters in Bærum and a factory in Narvik, went bankrupt last week. In Sweden, a trustee is already trying to clean up the aftermath of Northvolt's bankruptcy.

The adventures

TECO 2030 was supposed to be an adventure within fuel cell technology. Northvolt in battery production. Instead, they both became an industrial nightmare, not least for the local businesses that took on construction projects and other deliveries. Without getting paid, it turns out.

The preliminary reports from the trustees tell stories about companies with enormous debt and almost no assets. Perhaps, when the review is complete, it will also tell stories about companies without purpose or meaning.

TECO 2024, which was supposed to create half a thousand jobs in the north, is going out of Norwegian history with a debt of NOK 510 million, according to the petition sent to Asker and Bærum District Court. At the same time, the company stated that it had invested in assets of NOK 785 million.

So perhaps bankruptcy was not necessary then?

Values lost

Yes, it was, as the values were not accurate. They were closer to zero than 785 million. After all, what is the sales value of a technology that is not "completely developed and commercially marketable"? And which will "require significant costs and time to develop," according to the same petition.

In Northvolt, where the Swedish state has been far more generous than the Norwegian one, history is being written that is barely comprehensible.

The company leaves behind a debt of almost NOK seven billion, more than twice as much as it was presumed. Of the 6.9 billion, a full 5.7 billion is owed to suppliers, many of them local companies in the north of Sweden.

From the outside, things looked different. Shortly before the bankruptcy, it was claimed that Northvolt had assets worth SEK 13.9 billion.

So perhaps bankruptcy was not necessary then?

Burned out site

Yes, it was, because the company's management was better at telling stories than producing batteries. 

At the burned-out site of the bankruptcy, imported equipment, machines in boxes, and containers purchased for 5 billion are left behind. The equipment was never used, barely even un-boxed. Its scrap value is estimated at about 200 million by the trustee. A discount of 96 percent, if someone, against all odds, would have use for it. An additional 1000 containers worth of equipment are said to have been shipped, heading toward Skellefteå. These are naturally being held back now, but that does not increase the value of their content.

Without being particularly demagogic, I could ask which green logic is behind transporting all input factors from China to Sweden and, simultaneously, claim that people are investing in green in the Nordic countries to compete with precisely China.

But I won't.

Major consequences

At the time of writing, it is unclear who will lose money after TECO 2024's bankruptcy. In Sweden, Northvolt's bankruptcy partly affects local companies that thought they were part of an industrial adventure. The four largest Swedish creditors are all in the construction industry and will have to look far for a total payment of more than 1.3 billion.

The two recent bankruptcies have consequences far beyond their industrial breakdown. After all, who would ever dare enter into agreements with companies that repeatedly leave empty shells when the bills are due?

Perhaps it is not so strange that investors are absent when a necessary green shift ends in a blood-red money pit.