The reports of VW's write-down come after Northvolt – after a futile search for new capital – applied for bankruptcy protection under Chapter 11 in the US bankruptcy law last Thursday.
Shares become worthless
The massive write-down was expected by many experts.
The most common outcome for shareholders in Chapter 11 is that their shares become worthless, says Professor Bo Becker at the Stockholm School of Economics.
Northvolt – with a debt mountain of around 60 billion kronor – aims to negotiate down its debt burden and bring in new capital under the bankruptcy protection in the Texas court.
The reconstruction in the US can, according to Northvolt, be combined with a similar process in a Swedish court.
Volkswagen owns around 21 percent of the shares in Northvolt ahead of the forthcoming reconstruction.
The second-largest owner, American Goldman Sachs, will also make a large write-down of the value of the investment bank's Northvolt shares, according to reports in the Financial Times over the weekend.
The largest Swedish shareholders are Vargas Holding, with Swedish financier Harald Mix, and the recently departed CEO and co-founder Peter Carlsson.
Swedish pension funds among the owners
Four state-owned AP funds have, after a series of billion-kronor investments, also a large joint holding in Northvolt, of 3.7 percent of the shares. Other major Swedish owners are the pension managers AMF and Folksam.
In its application for bankruptcy protection, Northvolt stated that the company wants to bring in a new strategic partner.
In connection with the application, the VW-controlled Swedish truck manufacturer Scania – a major Northvolt customer – provided a bridging loan of over one billion kronor to Northvolt.
