The premier says Quebec will not agree to the bank’s demands for it to give up its securities to save the battery project’s owner.
QUEBEC — Engaged in negotiations to save the Northvolt battery factory project, the Legault government says it will not add a penny to the project and will not give up its securities on the sums invested in the struggling Swedish company.
One of the main creditors of the Swedish company, the investment bank Goldman Sachs, is demanding access to the assets of subsidiaries abroad, particularly in France, as collateral as a condition for reinjecting funds and saving the company.
A source close to the matter confirmed the information to The Canadian Press on Tuesday morning and suggested that the minister of the economy, Christine Fréchette, would be supportive. A government spokesperson later questioned the origin of this statement.
“We are asking Quebec taxpayers to guarantee the investment of a major New York bank in a startup in Sweden,” Québec solidaire co-spokesperson Gabriel Nadeau-Dubois said during question period.
Premier François Legault said his government was not going to back down an inch and sent a message to the New York bank.
“If I were in Goldman Sachs’s shoes, before adding hundreds of millions to Northvolt, I would try to negotiate with everyone. … We have seen others, so there is no question of adding money, then there is no question of withdrawing our guarantees, and we are not afraid of Goldman Sachs.”
Parti Québécois Leader Paul St-Pierre Plamondon criticized the Coalition Avenir Québec government for having invested in the parent company and in debentures.
“We sent Quebec public funds to Stockholm in a company that is dying and currently, we are being relegated to last in the list of creditors for a (factory) project that is not happening,” he said.
According to Legault, large shareholders of Northvolt like Volkswagen are afraid of losing their investments and Goldman Sachs is ready to reinvest rather than lose everything, but it asked for help from Quebec, which said no.
“Come on, as if we will agree to take money from Northvolt Quebec to send it to Sweden, and (St-Pierre Plamondon), stop talking nonsense.”
“We are in negotiations and we are working to protect the interests of Quebecers,” Fréchette said during the question period. “We are making sure that this goes forward.”
“What did you actually negotiate? (She) is incapable of negotiating with Goldman Sachs,” accused Liberal MNA Frédéric Beauchemin.
“How much is our investment worth? We no longer have guarantees, so it’s worth less. … There are no more orders, so it’s worth less.”
In a message, a well-informed government source indicated Tuesday that Quebec wants to preserve the $500 million invested by Investissement Québec.
The Caisse de dépôt et placement du Québec also invested $200 million in the project.
The Legault government would keep the $240 million for the land as collateral, the source indicated.
Quebec has already granted a total of $700 million, but another amount of $300 million should be paid in the form of an unsecured long-term loan, under certain conditions.
Legault had mentioned two of the conditions, meaning that this envelope has not yet been granted.
The first, that the financing of the project is completed, and the second, that the factory is under construction. But the project is not yet at this stage.
Quebec’s total investment would therefore be $1 billion, for a total project valued at $7 billion. Ottawa also committed $1.37 billion, but the federal government has not yet paid a penny.