(Bloomberg) -- Northvolt AB is scrambling to pull together emergency funding after a previous plan fell apart, according to people familiar with the matter, leaving the troubled Swedish battery maker with dwindling options as it runs low on cash.
The $300 million package that was near agreement last month is no longer active, the people said, asking not to be named because the discussions are private.
Some investors are unhappy that the brands of top shareholder Volkswagen AG with Northvolt contracts haven’t committed to buying more battery cells, some of the people said. An agreement needs to be reached over the next couple of days, one person said.
The parties continue working to put together a stopgap funding plan, the people said. Lenders would have to agree to amend and extend their current credit agreements in order for the electric-vehicle supplier to avoid a court-supervised restructuring, they said.
Swedish newspaper Dagens Industri reported this week that Northvolt was considering a US Chapter 11-style bankruptcy.
Northvolt has been discussing different ways forward, it said in a statement, and will communicate results once it reaches a conclusion. “We continue the dialogue with our stakeholders,” the company said.
A spokesperson for Volkswagen declined to comment.
Crunch Time
The coming days have been described as crucial for Northvolt, with some investors hoping for a last-minute intervention from Volkswagen, the people said. The German automaker, currently locked in negotiations over the restructuring of its namesake brand, hasn’t made Northvolt a priority, according to people familiar with the discussions.
Volkswagen’s Swedish truckmaking brand Scania is Northvolt’s largest customer, and some investors are demanding it commit to more cell purchases, the people said. It has so far resisted, and this is the central obstacle in reaching an agreement, the people said.
While VW’s brands have delayed delivery of some orders, they haven’t canceled any battery orders with Northvolt, one of the people said. Increasing their planned Northvolt cell volumes would mean reducing orders with VW’s own in-house battery unit and run the risk of potentially costly cancellations with other suppliers.
Earlier this year, BMW AG — another Northvolt shareholder — canceled a large battery order from the Swedish firm over quality issues.
The complexity of negotiations between numerous debt and equity investors have slowed progress toward an agreement, as well as uncertainty in the EV market that Northvolt supplies, Bloomberg News reported earlier this week.
The Swedish government on Friday reiterated it has no plans to rescue Northvolt.
--With assistance from Wilfried Eckl-Dorna.
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