Rumor of bankruptcy in the United States: the next few days will be crucial for Northvolt

The next few days will be crucial for Northvolt’s future, as a rumor of US bankruptcy looms over the company’s negotiations with its investors to secure short-term financing worth several hundred million dollars.

• Also read: Liquidity crisis: Northvolt sells factory in the United States

Rumor has it that Northvolt’s management is considering filing for bankruptcy protection in the United States with the aim of being able to reorganize its finances under court supervision.

This strategy would also allow the battery manufacturer to borrow new funds.

In this scenario, the company would have four months to develop a restructuring plan, with the possibility of an extension. According to information from the Swedish newspaper Today’s Industrythis is currently Northvolt’s main strategy.

Remember that the company wishes to obtain emergency financing of $300 million, to give itself time to prepare a larger financing operation.

Northvolt shareholders, however, want to obtain certain guarantees before taking out the checkbook again, to have a chance of being repaid if the Swedish company becomes insolvent.

In particular, they wish to have their say on the fate of the various subsidiaries of the Swedish company, and therefore on the $7 billion factory project in Quebec.

Production issues

In the meantime, Northvolt’s production is idling at its main factory in northern Sweden.

The company has been missing its internal production targets for “deliverable” battery cells for several months, according to the Reuters agency, which had access to Northvolt’s production plan.

Still according to Reuters, Northvolt has set itself the goal of producing 51,000 battery cells ready for delivery on a weekly basis by the end of 2024.

This target is not only half as ambitious as that of 100,000 publicly mentioned a few months ago, but the Swedish company is far from reaching it.

For example, Northvolt only delivered 22,000 battery cells in the week of October 21, while its production target was 30,000 cells for this period.

In Quebec

Since the very beginning of its “strategic review” last summer, Northvolt has assured that its factory project in Montérégie will indeed see the light of day, but it remains to be seen in what form and according to what timetable.

For now, the company says that work is progressing well and that excavation and leveling of the ground have been completed on the site which is to accommodate a first building.

More details will follow…