The Swedish battery giant Northvolt is now under such pressure that it is considering going bankrupt. Bankruptcy protection is also an option, sources say.
Battery maker Northvolt this week is considering filing for bankruptcy protection under the U.S. bankruptcy law, known as Chapter 11.
According to the Financial Times, actual bankruptcy is also a possibility. According to the newspaper, large investors have already written down their investments in Northvolt to a value of zero kroner.
– Chapter 11 is possible, even bankruptcy is still an option, says a source with knowledge of the situation in Sweden.
Northvolt is in a serious economic crisis, and the company has not yet managed to raise new capital. According to managing director Peter Carlsson, approximately DKK 6.5 billion is needed to avoid collapse.
However, negotiations with potential investors about new capital supplies appear to have stalled.
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According to the Financial Times, time is running out for the company, and a solution must be found within a short time to avoid bankruptcy.
Bankruptcy protection under Chapter 11 is similar to a reconstruction in Denmark, where the company is given the opportunity to restructure debts and continue operations under the supervision of a court.
According to the newspaper's sources, one of Northvolt's main investors estimates that a decision on bankruptcy protection or bankruptcy could be in place as early as this week.
There has been no official announcement from Northvolt about the current situation. But the investors are said to have lost confidence that the company can restore its finances and continue its production without a major financial rescue.
The absolute largest investor is German Volkswagen. BMW, which is also part of the ownership group, has already canceled a huge order. Read more about it here.
Northvolt, which was previously considered one of the most important players in the development of electric vehicle batteries and energy storage in Europe, is now facing a fateful week.
The situation underlines the challenges that companies in this industry can face as they face rising production costs and a competitive market.
It is not yet known whether Northvolt can find a solution at the last moment, or whether the company will have to take the drastic step and seek bankruptcy protection.
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