Nordic energy cell in a bind: Northvolt seeks fresh capital

The financially troubled Swedish battery company Northvolt met with several stakeholder groups on Monday to discuss a capital increase of 200 million euros. According to insiders, about 150 million euros have already been secured through verbal agreements. These financing efforts come amid a strained liquidity situation for the company, whose production activity at its main plant in northern Sweden has fallen short of expectations. Despite high expansion costs, Northvolt struggles to increase its revenues, while one of its units recently filed for bankruptcy protection to develop long-term financing prospects. Advocates of Northvolt declined to comment on the current financing negotiations. The automotive supplier Scania, a Volkswagen subsidiary and Northvolt's main shareholder, is reportedly considering placing pre-orders for battery cells as a form of support. This move could provide Northvolt with the desperately needed time to devise a more sustainable financing strategy. Interestingly, the current financing amount is significantly lower than the 7.5 billion kronor that were discussed as recently as last month to support Northvolt until a potential IPO in 2025. In light of the ongoing liquidity crisis, the company has already scaled back numerous projects to prioritize battery cell production at the Skelleftea plant. Although the governments of Sweden and Germany, where another major Northvolt battery factory is being established, have emphasized their support, there are no concrete commitments of new public funds. Sweden's Minister for Enterprise, Ebba Busch, highlighted the importance of an independent European battery supply and encouraged investor participation. Northvolt faces financial obligations, including an upcoming tax debt of 287 million Swedish kronor that is due shortly. The company confirmed its intention to make the payment.