Scania’s loan will keep Northvolt operational during bankruptcy as it fights to survive.
Swedish truck maker Scania will loan $100m to Northvolt as the beleaguered battery manufacturer files for bankruptcy in the US.
It comes as Northvolt announced on Thursday that it was filing for Chapter 11 bankruptcy protections in the US, followed on another announcement on Friday that the company’s CEO and co-founder, Peter Carlsson, was stepping down from his role but remaining on the board and in a new capacity as senior adviser.
Scania’s loan – which is structured as “debtor-in-posession” financing under Chapter 11 – will support keeping the doors open for now, and keep the flagship Northvolt Ett gigafactory producing cells.
The restructuring process also opens the door for another $145m in cash collateral to be made available to the company.
“Today marks a significant new phase for Northvolt as well as for me personally. The Chapter 11 filing allows a period during which the company can be reorganized, ramp up operations while honoring customer and supplier commitments, and ultimately position itself for the long-term. That makes it a good time for me to hand over to the next generation of leaders,” said Carlsson in a statement.
Pending a search for its new chief executive, the battery company will be led by a triumvirate comprising its CFO Pia Aaltonen-Forsell, president of cells Matthias Arleth and chief restructuring officer Scott Millar.
It comes quickly after the investment chief of Northvolt’s largest shareholder – Volkswagen Group, which also owns Scania’s parent company Traton – stepped down from the company’s board.
Traton’s CEO said back in September that it would continue to have Northvolt as Scania’s single battery supplier despite the troubles it was having in production and delivery. Last week, however, Scania’s CEO told Reuters that the truck maker – which aims to have half its sold vehicles be electric by 2030 – was in talks with other battery makers.
Scania made its initial investment in Northvolt in 2018.
Northvolt’s troubles represent not just a setback for its shareholders, but for the European battery industry as a whole. Northvolt had been heralded as a European champion to rival powerful Asian counterparts.
It’s restructuring process is expected to conclude in the first quarter of 2025.
Fernando Moncada Rivera
Fernando Moncada Rivera is a reporter at Global Corporate Venturing and also host of the CVC Unplugged podcast.
