Swedish battery cell manufacturer Northvolt may be on the verge of filing for bankruptcy in Sweden if it fails to secure fresh funding, local newspaper Dagens Nyheter (DN) reported on Tuesday, citing two sources.
The company, which sought U.S. Chapter 11 bankruptcy protection in November last year, has been grappling with financial difficulties as it struggles to scale up production at its flagship plant in northern Sweden. DN reported that Northvolt’s board could file for bankruptcy on Wednesday for “the entire Swedish business” unless new capital is secured.
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A final decision on the company’s future is expected to be made on Tuesday evening or early Wednesday, the report added. Northvolt declined to comment.
Once a bankruptcy filing is approved by a court, a trustee is appointed to oversee the company’s assets and distribute them to creditors, effectively removing management from decision-making. The trustee may attempt to find a buyer for the company, but operations are typically halted in the process.
Swedish business daily DI also reported concerns among sources close to the situation that Northvolt is “getting close to a bankruptcy.”
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Northvolt, which has positioned itself as a key player in Europe’s battery industry, was seen as a counterbalance to Chinese battery makers such as CATL (300750.SZ) and BYD (002594.SZ). Since its founding in 2016, the company has received over $10 billion in equity, debt, and public funding, with Volkswagen holding a 21% stake and Goldman Sachs owning 19%.
Former CEO Peter Carlsson, who stepped down shortly after the Chapter 11 filing, previously stated that Northvolt required up to $1.2 billion to stabilize operations. The company had secured a $5 billion green loan last year for plant expansion, but the funding was later canceled due to mounting financial difficulties.
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At the end of January, Northvolt’s outstanding debt stood at more than $8 billion, according to previously released documents.
