Sweden’s Northvolt filed for Chapter 11 protection in the US Bankruptcy Court for the Southern District of Texas on 21 November and is on the hunt for a new CEO after Peter Carlsson resigned.
The company said the move enables the company to restructure its debt, appropriately scale the business to current customer needs and secure a sustainable foundation for continued operation.
Chapter 11 also gives breathing space to allow Northvolt to implement strategic review decisions to rescope the business. The filing covers Northvolt AB and eight subsidiaries. Chapter 11 is different from bankruptcy proceedings in Sweden or elsewhere, and the company said it will continue to make deliveries, pay wages, insurance and utilities bills, and taxes.
The process allows access to new funding, including $145 million in cash collateral.
An unnamed existing customer has put up $100 million in the form of debtor-in-possession (DIP) financing, a specialised type of financing for businesses restructuring through a Chapter 11 process. Swedish media reports the money is coming from truck maker Scania.
Northvolt Ett, the company’s flagship gigafactory in Skellefteå, northern Sweden, and Northvolt Labs in Västerås, Sweden, will remain operational as Northvolt ramps up production.
Northvolt Germany and Northvolt North America, subsidiaries of Northvolt AB, are financed separately and “will continue to operate as usual” outside the Chapter 11 process.
The company expects the process to be completed in the first quarter of 2025. It will evaluate proposals for new investment.
Northvolt said it may take legal action in other jurisdictions to facilitate the US Chapter 11 proceedings to include entities in the US, Sweden and Poland.
Northvolt is being advised by Teneo as its restructuring and communications advisor. Kirkland & Ellis LLP, A&O Shearman and Mannheimer Swartling Advokatbyrå AB are serving as legal counsel. Rothschild & Co is hired for the marketing process.
Court filings and information about the Chapter 11 cases are available on a separate website.
Carlsson, who will remain on the company board, said: “Today marks a significant new phase for Northvolt as well as for me personally. The Chapter 11 filing allows a period during which the company can be reorganised, ramp up operations while honouring customer and supplier commitments, and ultimately position itself for the long term. That makes it a good time for me to hand over to the next generation of leaders.”
Photo: not much to smile about as CEO Peter Carlsson resigns and Northvolt files for Chapter 11. Northvolt
