(Bloomberg) -- Struggling Swedish battery maker Northvolt AB met with multiple stakeholders on Monday as it seeks €200 million ($219 million) in fresh funds, according to people familiar with the matter.
During the call, participants including shareholders and lenders to the company learned that about €150 million of that amount had been secured under verbal agreements, said one of the people, who asked not to be identified discussing a private matter.
The new funding plan has emerged in response to a cash crunch at the maker of electric vehicle batteries. Northvolt has struggled to ramp up production at its main plant near the Arctic Circle in Sweden, constricting revenue at a time high costs from its expansion piled up. One of its units sought bankruptcy protection on Tuesday as the firm works to find a longer-term funding solution.
Northvolt spokesperson Matti Kataja declined to comment on the fundraising. The company’s plans to seek €200 million were reported earlier by Reuters.
Some financial aid could also come in the form of battery-cell pre-orders, including from truckmaker Scania CV AB, as well as ordinary loans, business daily Dagens Industri reported. The purpose is to buy time for Northvolt to come up with more long-term funding, it added.
Scania is a truckmaking unit of Volkswagen AG, Northvolt’s biggest shareholder, and both are customers for its electric-vehicle batteries. Volkswagen declined to comment.
Smaller Request
The funding figure currently under discussion is markedly lower than the 7.5 billion kronor ($737 million) that DI reported the company sought last month. That amount was seen as carrying the company through to a possible stock-market listing in Sweden in 2025.
In recent weeks, Northvolt’s liquidity crisis has mounted, and the company has sharply cut back on numerous projects to focus on scaling up battery cell output at the plant in Skelleftea.
On Friday, the governments of Sweden and of Germany, where Northvolt is building a large battery factory, expressed support for the company while falling short of pledging new taxpayer funds.
Swedish Enterprise Minister Ebba Busch highlighted the importance of building an independent supply of electric-vehicle batteries in Europe to counter Chinese players and encouraged investors to participate.
“There is a large value in that being European, and that is the signal I want to send to those who are now considering whether to make investments,” Busch said. “There is still hope for Northvolt, and we hope this will succeed.”
A spokeswoman for Germany’s Economy Ministry reiterated the factory project in Heide remains on track, while declining to discuss details of the funding talks.
Looming financial obligations for Northvolt include a tax bill due in three days. The company told Bloomberg it intends to pay its taxes that are due on Monday. The tax bill is reported to total 287 million Swedish kronor ($27.6 million).
The combined tax bill is for the six biggest companies in the Northvolt group, and includes their liabilities for value-added taxes, employer’s fees and general tax deductions, Swedish Television reported on Tuesday, citing Swedish Tax Agency documents.
--With assistance from Niclas Rolander, Monica Raymunt, Kamil Kowalcze and Michael Nienaber.
(updates with government officials’ comments)
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