Canadian fund writes down Northvolt investment
The news was reported by Bloomberg, citing people familiar with the matter. According to Bloomberg, Investment Management Corporation of Ontario (IMCO) declined to comment on the write down. The Canadian pension fund bought convertible bonds from Northvolt in 2023. The money was to be used to allow Northvolt to expand battery cell production before being listed on the stock exchange.
That was just before Northvolt confirmed the location of its battery factory near Montreal in Canada, specifically on a 170-hectare site in McMasterville and Saint-Basile-le-Grand. It was the largest private investment in the province of Québec. The factory, called Northvolt Six, was scheduled to start production in 2026 and produce 60 GWh of battery cells per year when completed.
However, things did not go as planned for the Swedish battery maker. In November 2024, the cash-strapped company filed for creditor protection under US law. A short time later, Northvolt’s two largest shareholders, Volkswagen and Goldman Sachs, announced that they would write down their shares.
Although Northvolt said that its factories under construction in Canada and Germany would not be affected by its filing for Chapter 11, the company put its aggressive expansion plans to the test – it currently expects a delay of up to 18 months. Also, a few weeks ago, Paolo Cerruti, CEO of Northvolt North America, announced that he was stepping down. Northvolt North America is primarily responsible for the Northvolt Six cell factory planned in the province of Quebec.
What is clear is that Northvolt desperately needs cash. At a meeting in January, the company said that funds would last until the middle or end of this month. Northvolt apparently said it needed around $1.29 billion in additional capital by 2027.
Northvolt has been dealing with financial (and production) issues for some time now, and the situation has become increasingly tense in recent months. First, BMW had cancelled an order worth billions due to the delivery delays (caused by the production problems). The combination of cancelled orders and the capital-intensive problems related to ramping up production has put the company in a difficult financial situation.
As a result, the company initiated a strategic review, announced cost-cutting measures and reorganised the Management Board. In the meantime, however, doubts within the industry are growing: Traton brand Scania, which wanted to source all its battery cells for electric trucks from Northvolt, is reportedly looking for alternative suppliers.
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