The extraordinary meeting, which was announced in December, is closed to the media. But a decision is expected to be made on Wednesday afternoon.
Two alternatives to vote on
There are two alternatives for the owners to vote on, according to Erik Zsiga, press chief at Northvolt: to continue the business or liquidation.
"The board's proposal is to continue the business, among other things with regard to the ongoing Chapter 11 process. This is, of course, what the management and the entire company are working towards and planning for. If, despite this, a majority votes for liquidation, the board will apply for it," Zsiga writes in an email to TT.
Northvolt applied for bankruptcy protection in a Texas court under Chapter 11 of the US Bankruptcy Act last autumn, after failing to secure new capital and loans. This followed the German major customer BMW withdrawing an order worth over 20 billion kronor for electric car batteries due to quality and production problems.
Northvolt – with Volkswagen (VW), Goldman Sachs, and Harald Mix's Vargas Holding as its largest owners – had already stopped several major projects and laid off about a fifth of its workforce when the bankruptcy protection application was submitted.
Vargas, who has previously expressed support for Northvolt's reconstruction plans, does not want to comment on how they stand on the issue of liquidation or continued business before the meeting.
Folksam, a smaller owner with 0.7 percent, will participate in the meeting.
"We are currently analyzing the different alternatives and intend to participate in the meeting to have the opportunity to ask questions and discuss with other owners. Our intention is to act in a way that best preserves value for our customers," writes Kajsa Moström, press chief at Folksam, in an email to TT.
Debt mountain of 60 billion
The debt mountain – which the company hopes to reconstruct away most of – amounted to over 60 billion kronor when the bankruptcy protection application was submitted to the American court.
Before Christmas, Northvolt received approval from creditors to continue paying employees, key suppliers, taxes, and insurance, as well as public services, in order to continue operating under bankruptcy protection.
Northvolt aims to complete the reconstruction by the first quarter of 2025.
The largest owner of the crisis-stricken battery manufacturer Northvolt is, according to the latest available annual report, Volkswagen (VW), with 21 percent of the shares. VW is currently undergoing a major profitability crisis and is planning significant cutbacks in Germany.
The second-largest owner is the American investment bank Goldman Sachs, with 19.2 percent. The third-largest owner is Vargas Holding, with financier Harald Mix, who holds 7.2 percent of the shares.
Among institutional owners are also the state-owned AP funds, AMF Pension, and Folksam – as well as the Danish pension fund ATP.
Many of the owners have already written down large parts of the value of their holdings in Northvolt.
The Södertälje-based truck manufacturer Scania – which, via its parent company Traton, is part of VW's vehicle cluster and one of Northvolt's largest customers – provided a priority loan of 100 million dollars (approximately 1.1 billion kronor) to support Northvolt during the reconstruction.
At the extraordinary meeting, Northvolt's owners will decide whether to continue operating the business (i.e., undergo the planned reconstruction) or liquidate the company.
In the event of liquidation, the Companies Registration Office or a general court appoints a liquidator who replaces the company's board and CEO, and then carries out a sale of all assets. The purpose is to raise money to pay off as much of the debt as possible – and if anything remains after that – distribute the surplus among the company's owners.
Voluntary liquidation can be decided by the shareholders, but a company can be wound up through compulsory liquidation following a decision by a general court or the Companies Registration Office.
