Northvolt Shareholders Agree to Continue Operations
Shareholders in Swedish electric car battery maker Northvolt agreed Wednesday at an extraordinary general meeting to allow the financially-strained company to continue operating and avoid liquidation.
Northvolt applied for Chapter 11 bankruptcy protection in the United States in late November to enable it to restructure its debt and reorganise its business. The battery maker said in US filings that it owed $5.8 billion.
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"Northvolt is pleased with the results of today's EGM, at which shareholders voted to affirm the continuation of Northvolt's business," the company told AFP in an email.
It hailed "the support of our shareholders" amid the restructuring process, adding that Northvolt "continues to make progress... while ramping production and executing on its transformation."
The shareholder meeting was a procedural step required under Swedish law when shareholders' equity falls significantly, Northvolt spokesman Martin Hofelmann told AFP.
Northvolt's two biggest shareholders are German carmaker Volkswagen - also in financial difficulty - and U.S. investment bank Goldman Sachs.
Swedish truckmaker Scania, owned by Volkswagen and one of Northvolt's top customers, has pledged $100 million in new financing. The bankruptcy filing also gave the company access to some $145 million in cash collateral.
Northvolt said in September it was slashing 1,600 jobs - a quarter of its staff - and suspending the expansion of its Skelleftea site in northern Sweden as it struggles with strained finances and a slowdown in demand.
The company, founded in 2016, has been seen as a cornerstone of European attempts to catch up with Asia and the United States in the production of battery cells, the crucial component of zero-emission cars.
Europe accounts for just three percent of global battery cell production, but has set its sights on 25 percent of the market by the end of the decade.
The battery maker has been plagued by production delays, which in May led car manufacturer BMW to drop an order worth 2 billion euros (about $3.6 billion CAD).
Northvolt said it plans to focus on its "core business", prioritising battery cell production over other parts of the production chain - such as cathode production and recycling.
