Northvolt in the crisis: giant debts and construction of the gigafactory continues!

Northvolt in the crisis: giant debts and construction of the gigafactory continues!

Heide, Deutschland - The Swedish battery manufacturer Northvolt faces enormous financial challenges, with debt of almost six billion US dollars. Despite this crisis, the company continues the construction of a new factory in Dithmarschen. In particular, the Schleswig-Holstein government and Northvolt itself stick to the plans, despite the ongoing Chapter 11 procedure, which was recently requested in Houston due to bankruptcy. The bankruptcy case has not yet been opened, but the creditors show interest in it, even if a clear decision on the continuation of the procedure has so far been pending, as ndr reports .

financial security and risks

The company's financial situation has a direct impact on the German KfW Bank and the state of Schleswig-Holstein, which together for 600 million euros. These funds are crucial because they were specially provided for the construction of the factory in Heide. If the renovation process fails, there are considerable losses that could have catastrophic consequences for the public sector. In an initial assessment, Marc Liebscher from the protection community of investors said that the creditors will probably experience a "haircut", which means that they could only get part of their claims back. This could cost up to 300 million euros for Schleswig-Holstein, which is more than 100 euros for every inhabitant, so Tagesschau .

In addition, the financial burden for Northvolt is enormous, with a weekly “cash burn rate” of $ 30 million. In order to keep the company alive, an investor would be necessary to provide one billion dollars annually. These challenges are still exacerbated by production problems in the Swedish parent company, where difficulties in the maintenance of delivery contracts and a high committee rate continue to cloud the mood. Despite the catastrophic situation, the governments hope that Northvolt can realize its ambitious plans for the electric car battery factory in Schleswig-Holstein despite all the adversities.