“Group” financing of Northvolt
IN bridging financing a group of shareholders, lenders and customers are involved, and the instruments vary by group, anonymous sources told Bloomberg News, commenting on ongoing negotiations. The talks are now in their final stages, although there is some risk they could still end in failure, they added.
There are orders, but still no money
The ad hoc financing would give Northvolt time to secure more permanent financing that would help it get on the path to self-sufficiency. The company has battery orders worth tens of billions of dollars, but has problems delivering finished products of acceptable quality and prices. Northvolt declined to comment.
At least SEK 1.5 billion is needed
Bloomberg News sources did not say how much financial aid would be provided debt repaymenthow much to increase equity capital or other forms of support. Dagens Industri previously reported that Northvolt was close to receiving funding of from SEK 1 billion to SEK 1.5 billion (88-132 million euros).
Volkswagen will help, Scania needs it
Volkswagenas the main shareholder, said it would help Northvolt increase production of battery cellsbut provided few details about this support. His company, which makes Northvolt-powered Scania trucks, is a customer and could provide financial assistance, people familiar with the matter said. “We are in close dialogue but cannot provide further comments,” a company representative said Scania.
Extra money from the founder
Harald Mixfounder of Northvolt, promised that will recapitalize the company cash. The investor who runs Vargas Holding wrote in an editorial this week that they support the company’s efforts to continue operating despite “significant challenges.” Another shareholder, EIT InnoEnergy, will offer “significant” financial support, according to a local report.
The “bottomless bag” failed to cope with the Chinese competition
Since its establishment in 2017, Northvolt has received approx $10 billion in loans and equity. However, it must compete with established Chinese competitors such as Contemporary Amperex Technology and BYDwhich have been developing their potential for the production of battery cells over the years, and also have much lower costs.
The idea didn’t work out
The Swedish company’s strategy to aggressively expand into battery technologies has added to its numerous operational hurdles. The plans included not only rapidly scaling up production of complex cells, but also producing components such as cathode materials and building several new factories.
Forced reduction of costs and employment
In recent weeks, Northvolt has made a difference employment reduction and limited its ambitions, focusing on raising funds and increasing production in main plant in Skelleftea. The company’s development was suspended and the unit supervising the project was declared bankrupt. The company said it would reduce its global workforce by 20%, including 1,600 positions in Sweden.
