Lithium-ion Battery | Northvolt Subsidiary Files for Bankruptcy After Project Suspension

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Lithium-ion Battery | Northvolt Subsidiary Files for Bankruptcy After Project Suspension

Date：2024-10-09

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Keyword tags： LiB EU Northvolt

Following Northvolt's announcement on September 23 regarding business contraction and layoff plans, in which Northvolt decided to suspend the Northvolt Ett expansion project, the subsidiary responsible for the battery expansion project, Northvolt Ett Expansion AB, filed for bankruptcy with the Stockholm District Court on October 8.

This bankruptcy filing was submitted based on the financial situation of Ett Expansion AB. Swedish media revealed that the Northvolt Ett Expansion AB division's debt is approximately between 2 billion and 3 billion Swedish kronor ($194 million to $290 million). On the day of the bankruptcy filing, Northvolt Ett Expansion AB had approximately 459,000 Swedish kronor in debt default and faced claims of overdue bills amounting to 47 million Swedish kronor.

This expansion project was originally planned to double the capacity of the super factory in northern Sweden, but the group's board of directors canceled the expansion project last month. All work on this expansion project has now been suspended, with no employees, and all contacts of construction and financing will be managed by the bankruptcy trustee for future operation.

Ett Expansion AB is one of the 20 entities within the Northvolt Group, and the bankruptcy filing of this subsidiary is unrelated to any other legal entities and businesses within the Northvolt Group. Currently, the Northvolt Group is focusing resources on completing the capacity construction of the first phase of Northvolt Ett and fulfilling its commitments to its automotive customers.

According to Reuters, Northvolt had previously secured over $10 billion in equity and debt financing from participants such as Volkswagen, Goldman Sachs, and BlackRock. Earlier this year, Northvolt also reached an agreement with a group of lenders for a $5 billion green loan to cover the expansion costs of the large-scale factory in Sweden, but the cancellation of the construction project last month has put the funding at risk.

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