(Bloomberg) -- Northvolt AB is asking for shareholder approval to keep building battery cells while the bankrupt electric-vehicle supplier seeks the new funding needed to emerge from Chapter 11 protection.
The extraordinary general meeting scheduled for Wednesday at Northvolt’s Stockholm headquarters is billed as a “procedural step” by the company. The gathering, announced in December, is required when equity falls below one-half of registered share capital, spokesman Martin Hofelmann said in an email.
“The board’s proposal is for continuity, and this is the outcome we anticipate,” he said.
Even so, the vote is just one of many obstacles Northvolt must surmount to survive after one of one of the largest bankruptcies in 2024. The company’s restructuring plan relies on raising new money to support operations while its simplifies a widespread footprint including partially built factories far from its home base.
“We are currently analyzing the various options and intend to attend the meeting to have the opportunity to ask questions and reason together with the other owners,” Kajsa Forsberg Mostrom, a spokesperson for Swedish insurer Folksam, one of Northvolt’s smaller owners. “Our intention is to act in a way that best preserves value for our customers.”
Shareholders Vargas Holding AB and Scania CV AB declined to comment. Representatives for Goldman Sachs Group Inc did not immediately respond to a request seeking comment.
Northvolt sought bankruptcy protection in the US in November after a bid to secure rescue funding fell short, leaving the company with just one week’s cash and $5.84 billion in debt. That figure made it one of the most indebted companies to file for bankruptcy in the US in 2024, according to data compiled by Bloomberg.
Its failure underscored the disadvantages European battery firms face in challenging lower-cost Chinese and South Korean battery suppliers with years of experience. Despite the challenges, some of its backers still see value in that mission of establishing a foothold in the key EV industry.
“Our starting point is to protect invested values and to contribute to the long-term good of Northvolt,” said Karoline Hammar, spokesperson for 4 to 1 Investments, which invested 5.8 billion kronor ($530 million) in the EV supplier on behalf of Swedish state pension funds.
More than a month in since the filing, Northvolt is continuing to operate within the confines of the Chapter 11 process, designed to give it time to reset its capital structure. The company started with about $245 million of new funding, with a goal of raising another round of medium term financing. The plan is to exit Chapter 11 by the end of the first quarter.
Northvolt said it was “making progress” toward the restructuring in talks with investors and other stakeholders, and is continuing to deliver cells to customers.
“We are conducting a wide ranging and highly flexible marketing process to secure new money investment and intend to leave no stone unturned,” Hofelmann said.
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