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Northvolt AB has voluntarily filed for Chapter 11 reorganization in the United States. This move allows the company to restructure debt and gain access to approximately $245 million in new financing, supporting its long-term goals of establishing a homegrown battery production platform in the Western world.
Key Highlights:
- Northvolt will continue normal operations during the Chapter 11 process.
- Approximately $145 million in cash collateral and $100 million in debtor-in-possession financing have been secured.
- The reorganization aims to rescope business operations and prioritize commitments to customers.
- Northvolt’s German and North American operations are financed separately and will operate independently.
Northvolt’s Chapter 11 filing will help the company restructure its debt, appropriately scale business to meet current customer needs, and establish a sustainable foundation for continued growth. The process will allow Northvolt to continue fulfilling obligations to customers, vendors, and employees, while also leveraging the Chapter 11 framework to achieve financial stability. Importantly, this U.S.-based restructuring differs significantly from bankruptcy proceedings seen in Sweden or other jurisdictions.
The restructuring plan includes access to new funding sources, notably $145 million in cash collateral and an additional $100 million in debtor-in-possession financing from an existing customer, aimed at supporting ongoing operations during the reorganization. The company’s flagship locations, Northvolt Ett in Skellefteå and Northvolt Labs in Västerås, will remain operational to fulfill commitments. Meanwhile, Northvolt Germany and Northvolt North America will continue their projects outside of the Chapter 11 proceedings as these operations are separately financed.
Tom Johnstone, interim Chairman of the Board, commented, “This decisive step will allow Northvolt to continue its mission to establish a homegrown, European industrial base for battery production. Despite near-term challenges, this action to strengthen our capital structure will allow us to capture the continued market demand for vehicle electrification. We are likewise pleased by the strong support we have received from our existing lenders and our customers.”
During the restructuring, expected to conclude by the first quarter of 2025, Northvolt will evaluate new investment proposals. These evaluations will involve discussions with strategic and financial investors, existing lenders, shareholders, and customers. The company aims to build a resilient base of operations to support innovation and sustainable growth.
Johnstone added, “Throughout this process, we will focus on meeting our commitments to our stakeholders, including our employees, customers, suppliers, and the governments of the countries in which we operate. As a reorganized entity, we aim to establish a resilient base of operations and a competitive platform for innovation and long-term growth that will advance our work to build a more sustainable society.”
Northvolt has made its Chapter 11 filings in the U.S. Bankruptcy Court for the Southern District of Texas, requesting approval of “first day” motions to ensure ongoing obligations, such as payments to employees, critical vendors, and tax payments, continue smoothly. The company may also pursue additional legal actions in other jurisdictions to support the U.S. proceedings.
Legal and Advisory Support Northvolt is receiving advisory services from Teneo for restructuring and communications, with Kirkland & Ellis LLP, A&O Shearman, and Mannheimer Swartling Advokatbyrå AB providing legal counsel. Additionally, Rothschild & Co is running the marketing process for new investments.
More information about the Chapter 11 process can be found at https://cases.stretto.com/northvolt or by calling 855.314.8797 (U.S. and Canada) or +1 714.479.2596 (International).
About Northvolt Founded in 2016 in Stockholm, Sweden, Northvolt is a pioneer in sustainable battery manufacturing and has secured orders from several leading automotive companies. It currently produces batteries at its first gigafactory, Northvolt Ett in Skellefteå, and from its R&D campus, Northvolt Labs, in Västerås, Sweden.
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