When Swedish battery factory Northvolt filed for bankruptcy in November last year, it said it had enough capital to last until the end of January. Two weeks past that deadline, the company says its cash runway has been extended.
Once Europe’s best-funded startup, Northvolt filed for Chapter 11 bankruptcy protection in the US last November. The move meant the company gained access to $245m in capital — $145m in cash, and $100m in new financing from Swedish truckmaker Scania.
Northvolt spokesperson Erik Zsiga now tells Sifted the company has extended its runway by making further cuts. Zsiga declined to clarify how much leeway remains.
“Our priority now is securing short and long term financing,” he says, declining to comment on what happens if it should fail to do so. “That is not for us to comment on — we have to find funding,” he says.
After Northvolt went bankrupt, court filings show shareholders voted in favour of continuing business operations while it sought to recapitalise.
Northvolt has continued receiving orders from customers since filing for bankruptcy, providing it with some liquidity, the filings say. Zsiga confirmed to Sifted this was the case, but added that Northvolt’s focused on meeting existing orders rather than “aiming for some symbolic number.”
Northvolt selling off businesses
Northvolt told the court it’s working to sell several “non-core businesses”, including Hydrovolt, a joint venture with Norwegian company Hydro, focused on battery recycling. Hydro is expected to acquire Northvolt’s stake.
Northvolt is also seeking a buyer for its plant in Gdansk, Poland, which focuses on large-scale battery systems for energy storage. For its material division, mainly at its recycling facility Revolt, there are ongoing redundancy discussions taking place, Zsiga tells Sifted.
Northvolt has already offloaded several businesses. In November, it sold Cuberg, a US subsidiary focused on testing next generation battery cells.
It’s also in the process of selling its stake in a joint venture with Volvo, aimed at constructing a battery factory in Gothenburg, Sweden. Northvolt failed to meet its funding obligations to the project, Volvo has said, and the car company is now expected to pay nearly nothing to take over Northvolt’s 50% stake.
Exiting bankruptcy proceedings
As for the timeline of the restructuring process, Northvolt still hopes to finalise it within the first quarter, Zsiga tells Sifted.
Across its lifetime, Northvolt raised $13bn from the likes of BlackRock, Goldman Sachs and Baillie Gifford. Signs of trouble came in June last year, when shareholder BMW pulled a billion dollar battery order, citing production delays.
The demise of the climate tech darling triggered existential soul-searching in Europe, as many questioned whether the continent can scale crucial technologies such as batteries in the face of China’s dominance over the industry.
Read the orginal article: https://sifted.eu/articles/northvolt-extends-runway-but-says-it-needs-more-capital-to-survive-news/
