For the Swedish electric battery giant, which hoped to become a European leader capable of competing with the Chinese and the Americans, but which had suffered setbacks in recent months, seeing its debts grow without being able to find new financing, there was nothing left to do. only one alternative: on Thursday, November 21, at the end of the afternoon, Northvolt, which has very limited activity in the United States, announced, in a press release, that it had placed itself under Chapter 11 protection of American bankruptcy law, in order to restructure itself sheltered from the demands of its creditors.
“This decisive step will allow Northvolt to continue its mission of establishing a European industrial base for the production of batteries”, assures Tom Johnstone, the interim chairman of the board of directors of the company. In the press release, the company specifies that the American procedure will authorize it to “restructure your debt”while “adapting its activity to the current needs of its customers” and in “ensuring a sustainable basis for the continuation of its activities”.
“The company will continue to make deliveries to its customers, while fulfilling its obligations to its main suppliers and paying the salaries of its employees”specifies the press release, while emphasizing that neither of the two gigafactory projects in Germany and Canada is affected by the procedure.
As part of this procedure offered by American law, Northvolt will have access to a set of guarantees amounting to 145 million dollars, or the equivalent of 1.6 billion Swedish crowns. In addition, Swedish road transport giant Scania, one of the group's current clients, has agreed to pay the equivalent of 1.1 billion Swedish crowns in loans. “We are doing this to support production at Skelleftea [la giga-usine au nord de la Suède] »explained Erik Bratthall, spokesperson for Scania, to the economic daily Today's Industry.
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Expensive expansion strategy
On November 6, the company's CEO, Peter Carlsson, estimated that Northvolt needed 10 billion crowns to be able to keep its activities afloat in 2025. Since its creation in 2016, the small start-up, which has become a company employing 6,000 employees worldwide, managed to raise 13.8 billion euros, notably from manufacturers Volkswagen (its main shareholder), BMW, Scania and Volvo.
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