Workers walk on the site of the Northvolt Ett factory in Skelleftea, northern Sweden, on February 23, 2022.
Jonathan Nakstrand | AFP | Getty Images
Swedish battery maker Northvolt filed for Chapter 11 bankruptcy protection in the United States, dealing a blow to Europe’s electrification ambitions.
The company, once one of Europe’s most valuable private technology companies, on Thursday explain The voluntary insolvency measures will allow it to restructure its debt, reduce the size of its business and lay a sustainable foundation for its continued operations.
The company said it will continue to operate normally during the restructuring process, which is expected to be completed in the first quarter of next year.
Tom Johnstone, interim chairman of Northvolt’s board of directors, said: “This decisive step will enable Northvolt to continue its mission of establishing a home-grown industrial base for battery production in Europe.”
“Despite near-term challenges, this action to strengthen our capital structure will position us to capture continued market demand for vehicle electrification,” he added.
Northvolt said the restructuring will help it secure about $245 million in new financing, totaling about $145 million in cash and $100 million in debtor-in-possession financing – a type of loan provided to companies in financial distress.
The company said Northvolt Ett, its flagship battery gigafactory in Skellefteå, northern Sweden, will continue to operate.
It added that the restructuring process will ultimately help Northvolt achieve its long-term mission of creating an industrial base for Western battery production.
cost cutting drive
A partner of major European carmakers, Northvolt produces lithium-ion batteries for the booming electric vehicle industry, which has recently been rocked by stiff competition from countries including China.
The Stockholm-based company has long been considered Europe’s best hope of creating a homegrown EV battery champion. Lately, however, the company has been struggling to stay afloat while dealing with difficult times Major cost-cutting initiatives.
In September, Northvolt announced plans to reduce its global workforce by about 20% and its Swedish workforce by 25%.
