Northvolt has approximately $30 million in cash leftsaid in a statement. This is enough for just one week of operation. However, on the side debts is a gigantic amount of USD 5.84 billion.
In this situation, the Swedish manufacturer of batteries for electric vehicles decided to pursue American legal action. Northvolt filed for U.S. bankruptcy protection and restructuring under Chapter 11 of the Bankruptcy Codesaid in a statement on Thursday. The move caps months of talks with owners, customers and creditors to find a way to save the company from bankruptcy, which ended in failure.
Earlier, as part of efforts to save the company, Northvolt reduced a quarter of its workforce and scrapped expansion plans.
What does Chapter 11 of the Bankruptcy Code give Northvolt?
During plant reorganization Northvolt Ettflagship factory near the Arctic Circle in Sweden, it will work normally. According to the company, the Swedish plant will continue to deliver goods to customers, while fulfilling obligations to key suppliers and paying salaries to employees.
Thanks to the lawsuit Northvolt will have access to approximately $145 million in cashthe company announced. Scaniathe truck-making unit of Volkswagen and key customer Northvolt, told Bloomberg separately that will provide financing of $100 million.
U.S. Bankruptcy Court Judge Alfredo Perez said during Thursday’s hearing that he would approve Northvolt’s request to begin using bankruptcy financing and other loans to coverage of employee wages and expenses under Chapter 11 of the Bankruptcy Code. After the announced job cuts Northvolt still employs approximately 6,400 people in Sweden, Poland and the USA.
The Swedish government stands on the sidelines
The Swedish government, which for weeks has rejected any suggestion of providing cash assistance to Northvolt, hopes the Chapter 11 restructuring process will enable a long-term solution to be found for Northvolt.
