Stockholm-based electric vehicle battery maker Northvolt announced on Wednesday that its shareholders voted to continue operations, providing the company with critical backing as it seeks new funding and navigates Chapter 11 restructuring.
The Swedish firm, once seen as Europe’s leading contender in the EV battery sector, faced significant challenges last year, including production setbacks, reduced funding, and intensified competition from Chinese manufacturers. These difficulties culminated in a bankruptcy protection filing under U.S. Chapter 11 laws in November.
In a statement, Northvolt expressed optimism, saying the shareholder vote demonstrates confidence in its ongoing transformation. “Northvolt continues to make progress in the restructuring process while ramping production and executing on its transformation,” the company said. Since its establishment in 2016, Northvolt has secured over $10 billion through equity, debt, and public financing.
At the time of its Chapter 11 filing, Northvolt reported $5.8 billion in debt, a workforce of 6,600 employees, and cash reserves of just $30 million. Former CEO Peter Carlsson, who recently stepped down, estimated that the company requires $1 billion to $1.2 billion in fresh funding to stabilize operations. This funding is expected to come from a mix of financial and strategic investors, involving both existing and new stakeholders, according to sources familiar with the matter.
Northvolt spokespersons confirmed that discussions with potential investors are ongoing but declined to provide details on possible investment structures. The company has set a goal to complete its restructuring by the first quarter of this year.
Swedish law mandates that companies seek shareholder approval to continue operations if their equity value falls below half of the registered share capital. Key stakeholders, including Volkswagen, Goldman Sachs, and insurer Folksam, backed the board’s proposal to proceed. A Folksam representative, whose firm holds a 0.7% stake in Northvolt, emphasized their interest in the restructuring outcome.
Northvolt entered Chapter 11 proceedings with a $100-million loan from shareholder and customer Scania, which provided crucial interim financing. The company anticipates securing additional funds by late January, as it works to regain financial stability and maintain its position in the competitive EV battery market.
