Northvolt has requested its shareholders to contribute $1.29 billion over the next two years to support the turnaround of the Swedish battery manufacturer, according to sources familiar with the matter. The request was made to over 100 shareholders during a recent meeting, as the company aims to recover from its Chapter 11 bankruptcy filing in the United States last November. Northvolt, recognized as Europe’s leading contender in the electric vehicle (EV) battery market, has faced challenges in securing additional funding due to production issues and other operational setbacks.
Peter Carlsson, Northvolt’s former CEO and co-founder, previously indicated that the company would require between $1 billion and $1.2 billion in the long term, although he did not specify a precise timeline. The current funding request is intended to extend the company’s financial runway until 2027, coinciding with Northvolt’s efforts to attract new investments before its cash reserves are depleted in February.
In response to inquiries from Reuters, Northvolt stated that “numerous parties” have expressed interest in its financing process. A company spokesperson mentioned that Northvolt and its advisors are engaged in constructive discussions and due diligence with both strategic and financial investors but did not provide further details.
The outcome of the recent funding request remains uncertain, as it is unclear how shareholders responded or if they will contribute additional funds. Northvolt’s shareholder base includes prominent entities such as Goldman Sachs, BMW, Volkswagen, and Scania. The sources indicated that shareholders were informed the company had sufficient funds until at least mid-February, aligning with the information provided in Northvolt’s bankruptcy court filing. Another source mentioned that the company is expected to exhaust its cash reserves by the end of February.
Chinese, South Korean, and Japanese battery manufacturers are considered the most likely candidates to provide a rescue for Northvolt, given their expertise in EV battery production. Should Northvolt secure additional funding, it is anticipated to involve a combination of financial and strategic investors, including both existing and new stakeholders.
During a bankruptcy hearing, Northvolt’s attorney, Jimmy Ryan, confirmed that financing negotiations are ongoing and that the company plans to raise immediate funds by divesting several non-core businesses. Additionally, U.S. Bankruptcy Judge Alfredo Perez approved the sale of Northvolt’s stake in battery recycler Hydrovolt to Norsk Hydro for approximately $6.79 million.
Source: Yahoo Finance
