Northvolt’s dire financial situation has prompted its lenders to turn to a New York investment bank, PJT Partners, “to suggest options.”
Published at 3:13 p.m.
According to Bloomberg, which reported the news on Thursday, there is no question of restructuring or even bankruptcy regarding Northvolt. PJT Partners describes itself on its website as “a proven advisor […] in situations where a company is experiencing financial difficulties”, “including financial debt restructuring, liability management” as well as the protection of insolvent companies.
As for Northvolt, according to Bloomberg, which cites anonymous sources, “creditors are preparing for a whole series of scenarios.” The Swedish company’s main shareholders are Volkswagen (21%) and Goldman Sachs (19%). Northvolt has raised some US$15 billion since its founding in 2015. The Caisse de dépôt et placement du Québec (CDPQ) has lent it US$200 million.
Announced in September 2023 at a cost of $7 billion, its mega-factory on the South Shore of Montreal, for which the provincial and federal governments have promised $2.74 billion, will likely not begin operations in 2027 as planned. The Legault government has mentioned a delay of 12 to 18 months.
Review and public aid
The delay followed a string of bad news for Northvolt. Last July, company co-founder Peter Carlsson admitted it had expanded “a little too aggressively.” Amid slowing global demand for electric vehicles and competition from China, Northvolt announced a strategic review of its operations. The company failed to ramp up production of battery cells at its first plant in Sweden, leading BMW to cancel a $3 billion order last June.
Northvolt has notably abandoned its plans for a second plant in Sweden, specializing in cathodes. The plant in Heide, Germany, scheduled for 2026, is still in the plans.
On Monday, without giving specific figures, the company announced a reduction in its activities and job cuts, it has nearly 6,000 employees. On Tuesday, another blow fell on the young company, when Sweden refused to come to its aid. Without committing to participate in a possible round of financing, Volkswagen and the Swedish truck manufacturer Scania have however publicly assured that they will support Northvolt.
