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Nortvolt Files for Bankruptcy
Northvolt, Europe’s big battery hopeful, has filed for bankruptcy in the United States after failing to turn its fortunes around as the electric vehicle market continues to disappoint fans.
Northvolt has been struggling for a while now, with the Swedish government ruling out a bailout if it came to that. Sales have been problematic, costs have been high and BMW served a blow to the company when it pulled out of a $2-billion long-term battery cell contract saying Northvolt had failed to deliver the products on time.
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“Northvolt’s liquidity picture has become dire,” the company said in its Chapter 11 bankruptcy protection filing, as quoted by Reuters. The publication noted that Northvolt had just $ 30 million in cash, while its debt load stands at $5.8 billion.
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Still, Northvolt has managed to find $100 million in a loan for its restructuring, the company also said. The money comes from its biggest client, Swedish truck major Scania, which is also a shareholder in the company. The loan is meant to ensure battery cell production continues at the Swedish factory of Northvolt.
Interestingly, Northvolt also said the bankruptcy protection process would not change its plans for a new battery cell factory in Canada. The Quebec facility, Northvolt said, “will continue to operate as usual outside of the Chapter 11 process,” since it was financed separately from the parent company.
Since its incenption, Northvolt has raised $15 billion from heavyweights such as Volkswagen, Siemens, JP Morgan, and BMW, on top of transition-related subsidies in both Europe and the United States. Yet the money ran out without Northvolt being able to show anything much for it.
According to a Financial Times report from earlier this week, at least one investor in the company had written their investment off completely. The report also cited former Northvolt workers as saying that the company was plagued by problems, among which “trying to do too much, too fast.”
By Irina Slav for Oilprice.com
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