Waiting for interim funding | Time is running out at Northvolt

A sign that its coffers are becoming less and less full, the Swedish battery cell manufacturer Northvolt, at the heart of a liquidity crisis, is trying to secure short-term financing to be able to keep its head above water.

According to the Reuters agency, which cites sources familiar with the negotiations, the young company is trying to obtain around CAN 300 million from its investors. Its revival requires a much larger financing operation, but immediately, the company nevertheless needs money.

“It is well known that we are actively engaged in a financing round and that we are in constant dialogue with our customers, our investors and our lenders,” Northvolt said Friday through a statement from the company. Sweden, where its head office is located. This process is ongoing and we will share more details when it is complete. »

Northvolt, which still says it is planning a battery cell mega-factory in Montérégie, on the South Shore of Montreal, a project valued at 7 billion, has been forced to refocus its business model to reduce its expenses. The company has pulled the plug on a major project in Sweden in addition to announcing the layoffs of 1,600 people, approximately a quarter of its global workforce.

Full professor of strategy at the Faculty of Administrative Sciences at Laval University, Yan Cimon believes that the Swedish manufacturer’s efforts to obtain interim financing demonstrate a “sense of urgency”. This situation is, however, not unusual.

As part of its efforts to replenish its coffers, Reuters reported earlier this week that the Stockholm-based company was trying to sell equipment that would be used to make batteries.

On hold

In Quebec, we are still waiting to know the impact of the strategic review at Northvolt on its site which straddles Saint-Basile-le-Grand and McMasterville, in Montérégie. The Press has already revealed that the commissioning of the plant, scheduled for 2026, would be postponed. The delay could reach up to 18 months, according to the Legault government.

“The work surrounding our project in Quebec is progressing as planned,” said Paolo Cerruti, president and CEO of Northvolt’s North American branch and co-founder of the company, this week.

Quebec and Ottawa offered 2.74 billion to finance the construction of the complex.

There are currently 710 million in public funds that have been injected into the cell manufacturer, if we take into account the 200 million loan from the Caisse de dépôt et placement du Québec. The federal government has not paid anything yet.

In Sweden, the door is still closed to intervention in the cell manufacturer despite its financial setbacks. The country’s Deputy Prime Minister, Ebba Bush, who is also Minister of Energy and Industry, once again closed the door on Friday.

“The Swedish state does not intend to become a shareholder or provide direct taxpayer support outside of current regulations,” she argued in a statement.

However, this did not prevent M.^me Bush expressed support for Northvolt, calling its survival a “matter of geopolitical importance.” While China is the dominant player in the global battery industry, “it is in Europe’s interest” that the European company’s project “succeeds”, believes the Swedish Deputy Prime Minister.