Northvolt announced on Thursday that it has filed for reconstruction in the US through a so-called Chapter 11 process. This gives the company access to $145 million in liquid funds from a security package and $100 million in new financing from major customer Scania – approximately SEK 2.5 billion.
On Friday, it was announced that Peter Carlsson is leaving his position as CEO.
I am absolutely convinced that the company will emerge from this process as a stronger, albeit slightly different company, but financially stronger, says Peter Carlsson during a press conference.
When the reconstruction decision was made, there were approximately $30 million (around SEK 300 million) left in the bank, which would last a week, according to documents submitted to the US court.
A question of trust
The company's debts to lenders amount to a total of around SEK 60 billion, with many of them having maturities of several years, according to Ekot. The financing the company has received now is expected to last for a while, but it will only be a brief respite.
But for a complete reconstruction, we will need this additional recapitalization, says Peter Carlsson.
And where the money will come from is still highly unclear, with no answer to that question.
One of the major problems for Northvolt has been that it has not been able to get its production up and running as planned.
Building this type of advanced production, taking in so much new personnel and setting up process windows in these advanced processes has taken longer than we thought.
Does it boil down to a question of trust for new financiers that you will get production up and running?
Absolutely, but if they and not least our customers didn't believe that we would solve this, we wouldn't have seen such large financing from customers, he says to TT.
It was not a requirement from the financiers that he should leave. He has, according to himself, not been fired. Rather, it's about the company now entering a different process, he says.
"A different company"
He does not see the battery company as a sinking ship:
I believe that Northvolt's conditions for survival are very strong.
Peter Carlsson is leaving his position as CEO but will remain as a senior advisor. He will also remain a member of the board. The recruitment of a new CEO has begun. In the meantime, the company will be led by three people, including CFO Pia Aaltonen-Forsell.
Chapter 11 is often referred to as a "reconstruction bankruptcy". It is suitable for companies that want to continue operating but need time to restructure their economy to pay their debts.
Another advantage of Chapter 11 is that it temporarily stops collection claims from creditors.
Once the application is submitted, creditors are temporarily prohibited from taking any action. The company or individual has four months to come up with a reorganization plan, but it can be extended to 18 months. After that, creditors can propose reorganization plans.
When a company or individual submits the plan, creditors vote on the issue. They are usually cooperative since the next step is to apply for a so-called Chapter 7 bankruptcy – where all assets are liquidated and creditors may end up with nothing.
Source: Debt.org, an American financial aid organization
