Major jolt to European battery ambitions: Northvolt files for Chapter 11 bankruptcy protection in US, CEO steps down

Stockholm-based Northvolt, a lithium-ion battery manufacturer, and certain of its subsidiaries announced on Thursday, November 21, that they have voluntarily filed for Chapter 11 reorganisation in the U.S. Bankruptcy Court for the Southern District of Texas. 

The Chapter 11 filings will help the Swedish company to reorganise its debt, adapt to customer needs, and create a stable foundation for future operations.

However, the company will continue to operate as usual during the reorganisation, similar to other international companies that have used the Chapter 11 process to reorganise their financial obligations.

The company will continue to make deliveries to customers while fulfilling obligations to critical vendors and payment of wages to employees.

The Chapter 11 restructuring process in the U.S. is distinct from a bankruptcy or administration proceeding in Sweden or many other countries.

This process will help the company obtain new funding, including about $145M in cash collateral.

Also, one of Northvolt‘s current customers has promised $100M to help the company during its restructuring.

This support will come in the form of debtor-in-possession (DIP) financing, which is specifically for businesses in Chapter 11.

Northvolt Ett, the main battery gigafactory in Skellefteå, Sweden, and Northvolt Labs in Västerås will continue operations as production ramps up to meet customer commitments.

Northvolt Germany and Northvolt North America, which have separate financing, will also operate normally outside of the Chapter 11 process. They are key to Northvolt’s strategy.

As part of the restructuring process, which is anticipated to be completed in the first quarter of 2025, Northvolt will evaluate proposals for new money investment.

Peter Carlsson steps down as Northvolt’s CEO

In other news, the company also announced that Peter Carlsson will take on a role as Senior Advisor and step aside from his role as CEO. He also remains a Member of the Board.

Peter Carlsson comments, “Today marks a significant new phase for Northvolt as well as for me personally. The Chapter 11 filing allows a period during which the company can be reorganised, ramp up operations while honouring customer and supplier commitments, and ultimately position itself for the long term. That makes it a good time for me to hand over to the next generation of leaders.”

Northvolt’s Interim Chairman of the Board of Directors, Tom Johnstone, comments “We are incredibly thankful to Peter for his vision and dedication to building Northvolt from an unprecedented idea to becoming Europe’s battery manufacturing champion. Peter’s perspective will continue to benefit Northvolt, as a Senior Advisor and Member of the Board, while the new leadership will steer the company into the next stage.”

The company will be led by Pia Aaltonen-Forsell, the Chief Financial Officer, and Matthias Arleth, who is now the Chief Operations Officer. They will work together with Scott Millar, the Chief Restructuring Officer, to lead Northvolt. A search for a new CEO is underway.

Tom Johnstone adds, “I am very pleased that the two recent additions to Northvolt’s leadership will jointly lead this next phase of operational improvement, increased customer focus, and financial restructuring.”