(Bloomberg) -- Germany will assume more than €600 million ($629 million) of debt that its development bank extended to Northvolt AB for the construction of a battery plant in the country.
The federal government will this month reimburse lender KfW for the value of a convertible bond and related costs, a spokesman for the economy ministry said in an emailed response to questions from Bloomberg.
Privately-held Northvolt filed for bankruptcy protection in the US last month after a desperate bid to secure rescue funding fell short. The Swedish company had been seen as a standard bearer for European hopes to stand up an independent supply chain for EVs, countering the dominance of well-established Chinese and South Korean manufacturers.
It’s not yet possible to tell if the German government faces losses, according to the ministry spokesman. The Bild newspaper reported earlier that the government faced total outlays of €620 million for KfW’s claims on Northvolt.
The state of Schleswig-Holstein assumed a €300 million guarantee for the convertible bond and will reimburse that sum to the federal government, according to the spokesman.
©2024 Bloomberg L.P.