Northvolt's Bankruptcy Discussions

By Marie Mannes

STOCKHOLM (Reuters) – Swedish battery maker Northvolt has been discussing the possibility of bankruptcy protection in the United States as one of several options for the cash-strapped company to survive, two people with knowledge of the matter told Reuters.

Northvolt has in recent months transitioned from being Europe's best shot at a home-grown electric vehicle battery champion to racing to stay afloat by slimming down, hindered by production problems, the loss of a major customer, and difficulties in raising more cash.

The lithium-ion battery manufacturer, which has secured approximately 10 billion euros ($10.57 billion) in funding since its startup in 2016, launched a comprehensive review of its strategy last July.

Business daily Dagens Industri, citing unnamed sources, reported that Northvolt was considering Chapter 11 proceedings under the U.S. Bankruptcy Code as a way to address its financial situation.

Earlier in the week, the publication reported that negotiations between the financially troubled firm and creditors, shareholders, and at least one customer for a short-term financing deal had stalled.

One of the sources indicated that discussions among stakeholders regarding a short-term funding solution have resumed, even as negotiations have become more challenging in recent weeks. A Northvolt spokesperson declined to comment on whether the company was planning to pursue Chapter 11 proceedings or engage in other speculation about its future.

"Since the beginning of the strategic review, we have continuously discussed various options, and that hasn't changed throughout the process," the spokesperson stated.

"We will communicate results once we reach a conclusion, while we maintain dialogue with our stakeholders."

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