Northvolt is making strides in securing a new financing package potentially exceeding $300m to bolster its financial stability into the next year, reported Reuters.
The Swedish battery manufacturer, which has faced challenges including production issues and competition, is in the process of gathering signatures for the deal that could be announced imminently.
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The company has engaged in discussions with investors and lenders over recent weeks to arrange short-term funding, three sources with knowledge of the situation told Reuters.
These talks come as Northvolt’s board works to stabilise the company’s finances amidst a challenging period for the EV battery sector.
“We have made significant progress towards securing a finance solution for Northvolt and we continue to have constructive dialogues with key stakeholders, including customers, suppliers, shareholders, and lenders,” a spokesperson for Northvolt told Reuters.
“We are now working intensely to conclude our financing dialogues in a timely manner.”
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By GlobalDataNorthvolt, once celebrated as Europe’s leading contender in the electric-vehicle battery market, has had to make tough decisions to remain operational.
The company has downscaled and reduced its workforce in response to production setbacks, reduced demand, and increasing competition from Chinese manufacturers.
In a significant development, Northvolt has disclosed that one of its subsidiaries has filed for bankruptcy following a strategic restructuring. This move is part of an effort to reduce costs and scale back on the expansion of battery manufacturing capabilities.
The subsidiary, Northvolt Ett Expansion AB, submitted the bankruptcy application to the District Court of Stockholm.
This step was taken “due to the financial situation of Ett Expansion AB,” Northvolt explained.
Since the suspension of the Ett expansion project on 23 September, all activities related to the project have been halted as part of the Northvolt Group’s broader reorganisation in Sweden.
