Northvolt, the Swedish manufacturer of electric vehicle battery cells, is reportedly on the verge of declaring bankruptcy in Sweden. Last year, the company sought U.S. Chapter 11 bankruptcy protection due to financial difficulties in scaling up production at its main plant in northern Sweden.
According to sources cited by the Swedish newspaper Dagens Nyheter (DN), Northvolt's board plans to file for bankruptcy on Wednesday for its entire Swedish operations if new funding is not secured by then. The board is expected to reach a final decision on the company's fate on Tuesday evening or early Wednesday.
In the event of a bankruptcy approval, a trustee would be appointed by the court to oversee the distribution of assets to creditors, leading to the cessation of operations and loss of management control over the company's decisions.
Concerns about Northvolt's financial status were also highlighted by Swedish business daily DI, which mentioned that insiders fear the company is approaching bankruptcy.
Having received substantial investments totaling over $10 billion from stakeholders such as Volkswagen and Goldman Sachs, Northvolt's former CEO stated the need for up to $1.2 billion to revitalize the business following the Chapter 11 filing. Despite securing a $5 billion green loan deal for plant expansion, the funding was revoked as the company's challenges increased. By the end of January, Northvolt's debt exceeded $8 billion, as disclosed in previous financial documents.