A Northvolt facility in Vasteras, Sweden, on Sept. 29, 2021.Helena Soderpalm/Reuters
A subsidiary of Sweden’s Northvolt filed for bankruptcy on Tuesday after the project it was developing was cancelled, court filings showed, while the rest of the cash-strapped battery-making group continued to consolidate operations.
The Northvolt Ett Expansion AB unit had debts estimated at between two billion and three billion Swedish krona ($264-million and $396-million), a court-appointed bankruptcy trustee told business daily Dagens Industri.
It had been responsible for a planned tripling of capacity at the group’s gigafactory in northern Sweden, but the company’s board last month cancelled the project.
“This is a necessary step as the expansion of Northvolt Ett has been halted and further investments in it would have risked the financial basis for Northvolt,” a spokesperson for the group said in an e-mailed statement to Reuters.
Tuesday’s bankruptcy filing had no impact on any of the Northvolt Group’s other businesses, the spokesperson said.
Northvolt said in September it would slim down and cut jobs, sparking fears that Europe’s best shot at a homegrown electric-vehicle battery champion may stall because of production problems, sluggish demand and competition from China.
On the day of its filing, Northvolt Ett Expansion AB had around 459,000 Swedish krona of debt that was in default and faced claims of 47 million krona in overdue bills, Sweden’s debt-enforcement authority Kronofogden told Reuters.
Other Northvolt units had overdue bills amounting to about 85 million krona, according to Kronofogden.
“Northvolt Group continues to be in dialogue with stakeholders for continued co-operation within Northvolt Group’s ongoing operations,” the company said in a statement.
The Northvolt Group declined to comment on the level of debt at Northvolt Ett Expansion AB.
Northvolt has previously received more than US$10-billion in equity and debt financing from players including Volkswagen, Goldman Sachs and BlackRock, filings show, and has been trying to raise more money to fund its expensive ramp-up.
At the start of the year, Northvolt had clinched a US$5-billion green loan package deal with a group of lenders, intended to pay for a large plant expansion in Sweden, but the cancellation last month of the construction project put the funding at risk.