A wave of layoffs has started at Northvolt. The company is looking for capital, and investors want security for loans

Luc Williams

According to the IF Metall trade union, Among the more than 1,200 dismissed employees of the battery manufacturer Northvolt, there were over 800 of its memberswho lost their jobs at the company’s key production plant.

The layoffs are part of the previously announced elimination of approximately 1,000 jobs at the Northvolt Ett plant in northern Sweden. Last week, two trade unions representing the factory’s white-collar workers announced that approximately 400 of their members will lose their jobs in the company.

According to Lena Lundgren, representative of the regional branch of the trade union in Skellefteå in Sweden, the number of dismissed IF Metall union members may reach 850 people.

Northvolt is looking for capital to survive

Northvolt is frantically seeking capital to ensure its survival by stabilizing short-term cash flow. Bloomberg previously reported that the company is getting closer to a $300 million financing deal. If the deal goes through, it would give the company more time to secure long-term financing.

Goldman Sachs Group and several other investors are willing to provide a bridge loan to Northvolt. However, in exchange for the help, it wants to receive shares in the Canadian unit of the battery manufacturer.

Canadian Quebec to be the guarantor of the Swedish company?

According to Bloomberg sources, Goldman Sachs, which heads the group, has asked the Quebec government’s financial arm, Investissement Quebec, to give Northvolt the green light to pledging capital in a Canadian subsidiary as security.

Northvolt is building a plant near Montreal with support from the Canadian and Quebec governments. The province has committed C$1.37 billion to the project ($991 million) and has already borrowed over a third of this amount.

If Northvolt went bankrupt, Quebec would pay off its principal loan first — as long as there is money left in the Canadian unit — and then other investors would have the right to the remaining assets.

About LUC WILLIAMS

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