Combination of shareholders, lenders and customers are participating in the bridge funding
A combination of shareholders, lenders and customers are participating in the bridge funding, and the instruments vary among these groups, the people said, asking not to be named commenting on private negotiations. Discussions are in the final stages, though there remains some risk they can still fall apart, they said.
The stopgap funding would buy time for the electric-vehicle supplier to secure more-permanent funding that would put it on a path toward self-sustainability. The company has sealed tens of billions of dollars in battery orders but has struggled to deliver finished products at acceptable quality and rates.
Northvolt declined to comment.
The people didn’t provide breakdowns between debt, equity, or any other forms of aid. Dagens Industri reported earlier that Northvolt was near a financing totalling between one billion and 1.5 billion Swedish kronor (US$95-$143 million).
Northvolt has been targeting about €200 million, Bloomberg News and others have reported. Goldman Sachs Asset Management, its second-largest shareholder, was considering joining the rescue, Bloomberg News reported this week.
“We are in close dialogue but we cannot comment beyond that,” a Scania representative said.
Harald Mix, Northvolt’s founder, has pledged to kick in more cash. The investor, who leads Vargas Holding AB, wrote a newspaper op-ed this week, supporting the company’s bid to continue despite “major challenges.”
Another shareholder, EIT InnoEnergy, will offer “significant” financial support, according to a local report.
Funding, competition
Northvolt has received about US$10 billion in debt and equity funding since its founding in 2017. But it’s up against established Chinese competitors like Contemporary Amperex Technology Co. and BYD Co. that have had years to master the challenge of making battery cells and have much lower costs.
The Swedish company’s strategy to grow aggressively in a range of battery technologies added to its numerous operational hurdles. The plans encompassed not just a rapid scale-up of complex cell manufacturing, but the production of components such as cathode materials and the construction of several new factories.
— With assistance from Niclas Rolander.