Northvolt files for creditor protection in the USA - Minister sees opportunities for restructuring

The financially troubled Swedish battery manufacturer Northvolt has filed for creditor protection in the USA. The company announced in the evening that it has filed for a restructuring procedure under "Chapter 11" of US bankruptcy law, as it stated. Northvolt aims to protect itself from creditor claims while it fights for its future as an independent company.

This step enables access to new sources of financing, Northvolt reported. A customer company will provide the firm with 100 million US dollars as a kind of bridge financing. Additionally, Northvolt will gain access to approximately 145 million US dollars from lenders (known as cash collateral).

For a long time, Northvolt was considered a beacon of hope for the European automotive industry in the context of battery production for e-cars. The largest shareholder of the manufacturer is the German car maker Volkswagen. The owners also include the US investment bank Goldman Sachs and BMW.

Effects on German project?

It is not yet foreseeable what this will mean specifically for the construction of a Northvolt gigafactory in Heide, Schleswig-Holstein. The company stated in the evening that its German subsidiary would be financed independently of the parent company. “It is not part of the Chapter 11 proceedings.”

Germany head Christofer Haux said, “Meanwhile, construction work in Dithmarschen is progressing. The site enjoys the highest priority.” However, it is already clear that the factory will start its operations later than initially planned. Cell assembly is expected to commence in the second half of 2027 instead of by the end of 2026.

At the beginning of the year, the EU Commission approved subsidies and guarantees for the multi-billion euro project in Heide amounting to 902 million euros. The federal government and the state of Schleswig-Holstein are supporting the construction of the battery factory with around 700 million euros. Additionally, possible guarantees amounting to another 202 million euros could be included. An administrative agreement stipulates that initially the state funds of 137 million euros should be disbursed. However, this has not yet happened. The federal government's share is about 564 million.

Northvolt does not initially intend to call funds

The battery manufacturer pointed out that construction in Northern Germany is on schedule as determined jointly with the federal and state government. “So far, no subsidies have been utilized, and Northvolt Germany will also not call any funds as long as the restructuring of the parent company continues.”

Schleswig-Holstein's head of the state chancellery, Dirk Schrödter (CDU), sees opportunities for a restructuring plan together with the creditors. It is regrettable that secured financing for the parent company in Sweden has not yet been achieved, Schrödter said. “It is good that, after the discussions of recent weeks, there is now clarity about the further proceedings and the next steps.”

“It is good that the construction work in Heide continues and now concrete statements on the timetable have been made,” said Schrödter.