Nordic pension fund investors in stricken Swedish battery firm Northvolt, including Sweden’s main AP buffer funds and Denmark’s ATP, have vowed to protect their interests after the company was forced to file for Chapter 11 bankruptcy protection in the US yesterday following months of talks to recapitalise the firm.
AP1-4, ATP, Swedish blue-collar pension fund AMF and Swedish pensions and insurance group Folksam are together estimated to own more than 10% of Northvolt, whose chief executive officer and founder, the former Tesla supply-chain chief Peter Carlsson, quit today.
Northvolt said the “voluntary reorganisation” facilitated access to approximately $145m (€139m) in cash collateral and $100m debtor-in-possession financing.
Carlsson said the Chapter 11 filing allowed time for the company to be reorganised and position itself for the long term.
“That makes it a good time for me to hand over to the next generation of leaders,” he said.
At 4 to 1 Investments - the Swedish joint venture between AP1-4 which holds the funds’ 3.5% stake in Northvolt - Jenny Askfelt Ruud, chair of the JV as well as head of alternative investments at AP4, said the four state-owned funds had been ready to back the ailing battery firm with fresh capital.
“4 to 1 Investments was prepared to take responsibility as a long-term owner and support Northvolt with capital in the financing process that has been ongoing during the autumn, but notes that there was not support from a sufficiently broad group of the company’s key stakeholders,” she said.
A Chapter 11 process provided new conditions for further development of Northvolt, she said.
“In the reconstruction process the company is now embarking on, we will continue the constructive dialogue we have with the company,” Askfelt Ruud said.
“4 to 1 Investments’ focus is now to protect invested values and, as part of this, take responsibility and work for the company’s best interests in the long term,” she said.
She said 4 to 1 Investments still assessed overall - as it had before the investment in Northvolt - that there was a need for a European ecosystem of companies for electrification and fossil-free transport.
ATP, which has invested around DKK2.3bn (€308m) in Northvolt and currently owns around 5.3% of the shares, said it was maintaining a dialogue with the company, “among other things, to ensure the best possible protection of the invested assets”.
ATP CIO Mikkel Svenstrup said Northolt’s strong expansion and associated large debt had made it very difficult to rescue the company.
“It is still very early days, but as part of a Chapter 11 process, the conditions can be created for Northvolt to have a future,” he said.
ATP was very disappointed the Swedish firm had been unable so far to sustainably secure competitive and efficient European battery production for the transport sector, he said, which he said was crucial to supporting green development, security of supply and growth in Europe.
“Many good people have worked long and hard on a solution, but in the end it unfortunately proved impossible to make ends meet within the existing circle around the company,” Svenstrup said.
AMF said in a statement today that while it might take some time before the situation was clarified, it hoped Northvolt would survive as a company.
“As a partner in Northvolt, we will watch over our savers’ interests going forward,” the pension fund said.
A spokesman for Folksam, meanwhile, which owns 0.7% of the company, told IPE the pensions group was continuing to follow the situation and was having recurring conversations with Northvolt representatives.
“As for Peter Carlsson’s departure, it is not entirely unusual that when a company restructures its operations and enters a new phase, there are also changes in the management as it demands a different type of leadership,” he said.
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