Northvolt’s financial troubles have prompted its creditors to turn to New York bank PJT Partners to “evaluate options” to get the company back on track, Bloomberg reported Thursday.
No restructuring plan is on the agenda, but the investment bank will work with law firm Milbank LLP to present a series of possible scenarios to revive the electric battery manufacturer, Bloomberg reports, citing people familiar with the matter.
Bad financial news has been piling up for the Swedish multinational for several months, after a rapid expansion in Germany and Quebec, in particular. A lack of liquidity is believed to be the cause of these setbacks.
Northvolt announced last week that it was suspending production of cathodes, one of the elements of a battery, at its giant Skellefteå plant in northern Sweden. The company also said it would cut jobs, but did not specify how many. The group currently has more than 6,500 employees.
The Swedish multinational has also abandoned plans to build another plant in Borlänge, 200 km northwest of Stockholm, where it planned to process cathode materials.
Earlier this week, the Swedish government said it had no plans to help the battery maker.
According to Swedish media, the group is trying to organize a new share issue worth 7.5 billion Swedish kronor (about 1 billion Canadian dollars) to overcome its difficulties. Public broadcaster SVT also reported that unpaid bills of 121 million kronor (16 million Canadian dollars) had been reported to a government agency responsible for settling debts.
As for the industrial megaproject planned in Montérégie, between McMasterville and Saint-Basile-le-Grand, it is still underway, but additional delays are expected, the Swedish multinational recently indicated. The Quebec government also specified that the 360 megawatts of energy promised to Northvolt are not at risk of being taken away for the time being.
The Swedish group’s main shareholders are Volkswagen, which holds 21% of its capital, and Goldman Sachs, which holds 19%. Northvolt has obtained financing, in the form of equity or loans, of $15 billion (13.5 billion euros) since its creation in 2016.
With Agence France-Presse