- BMW canceled a $2 billion battery order with Northvolt in June.
- The firm has just $30 million in available cash, enough to last one week.
- Northvolt’s CEO said it needs over $900 million to secure its finances.
Swedish electric vehicle battery manufacturing Northvolt has filed for Chapter 11 bankruptcy protection in the United States but will continue operations throughout the process.
The company has revealed it has just $30 million in available cash, which is only enough for one week. It added in the bankruptcy filing that it has $5.84 billion in debt but believes it can emerge from restructuring by the first quarter of 2025. It’s received $245 million in financing support for the bankruptcy, which includes a $100 million loan from Swedish truck manufacturer Scania, Northvolt’s largest single customer and a key shareholder.
Read: Volvo Asks $1.2 Billion From Swedish Government For Local EV Battery Plant
During a court hearing in the US during the week, US Bankruptcy Judge Alfredo Perez said he would permit Northvolt to draw $51 million of its Scania loan to pay wages for its 6,600 employees across seven countries. Reuters understands the company will evaluate several proposals from new investors alongside existing shareholders, customers, and lenders.
Northvolt let go of roughly a quarter of its workforce before the Chapter 11 filing. The bankruptcy has also revealed a $330 million convertible instrument from Volkswagen that’s due in December 2025. VW is Northvolt’s largest shareholder, holding a 21% stake in the firm.
In June, Northvolt was hit by BMW’s decision to cancel a €2 billion order for EV battery cells. In October, it was revealed that Volvo Cars planned to buy out Northvolt from the jointly-owned gigafactory in Sweden operated by Novo Energy, a joint venture between Northvolt and Volvo. Construction of this site started earlier this year with plans to manufacture enough cells to power up to 500,000 electric vehicles annually.
Northvolt chief executive Peter Carlsson said in early November that the company needed over $900 million to secure its finances permanently, Bloomberg reports. Founding shareholder Vargas Holding AB said it’s confident Northvolt will survive bankruptcy.
“We strongly believe in Northvolt’s ability to navigate through this period. A Chapter 11 reorganization will provide stability to turn around this challenging situation.”
