Stockholm (Reuters)-Northvolt, drum cell manufacturer, filed a judicial recovery in Sweden, the company said on Wednesday, marking one of the country’s largest corporate failures and effectively ending up with Europe’s best hope to develop a rival to challenge China in the sector.
“This was a decision that we did not make a light mood” and was the only “realistic way to follow,” Northvolt president Tom Johnstone told journalists, saying all paths were followed to avoid a request for protection against creditors.
The electric vehicle battery manufacturer sought judicial recovery in the US in November in expectation of securing funds to correct problems in increasing production in its main factory in northern Sweden.
The company’s debt was just over $ 8 billion among Northvolt entities that recovered, according to documents sent to the US courts at the time.
Northvolt’s request for judicial recovery is one of the largest in Swedish corporate history and the most important since the collapse of the Saab Automobile automaker for over a decade.
European vehicle automakers expected Northvolt to reduce the dependence on the western automotive sector compared to Chinese rivals, such as the catl batteries manufacturer and the BYD batteries and electric vehicle manufacturer.
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“It’s obvious that a lot went wrong, and the price is now being paid by our members,” Marie Nilsson, leader of the IF Metall Union, said in a statement.
The Swedish company has raised more than $ 10 billion in capital, debt and public funding since its inception in 2016, and its largest owners include Volkswagen, with a 21%stake, and the 19%Goldman Sachs.
Northvolt operations in North America and Germany did not file a judicial recovery, the company said, nor the company’s Polish unit.
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Germany’s Minister of Economy Robert Haback said he expects Northvolt to still be rescued by an investor who ensures the future of a planned factory in Germany. “The possibility definitely exists,” he said.
Porsche, which has supply contracts with Northvolt, said it started looking for alternatives. Volkswagen said it remains in contact with Northvolt, but did not comment on the company’s recovery request.
In recent months, several shareholders have reduced the value of their participation in Northvolt, while the longtime scania said it had aligned a new battery cell supply agreement.
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The German automaker BMW canceled a $ 2 billion request in June, after Northvolt did not meet a long -term contract.
