The rush to sell is the Swedish company’s latest effort to strengthen its finances. — Reuters
STOCKHOLM: Northvolt has held talks with a big industrial company on selling the business that makes electric battery packs for heavy industry, as a lack of funds forces it to try to divest one of its few profitable operations by the year-end, an internal memo shows.
The rush to sell is the Swedish company’s latest effort to strengthen its finances and shrink the business to focus on battery cell production, rather than being an all-in-one-shop for making and recycling electric vehicle or EV batteries.
Last month, Europe’s biggest hope for an EV battery champion filed for US Chapter 11 protection after talks to raise additional cash from stakeholders failed.
It needs up to US$1.2bil in external long-term funding.
In its Chapter 11 filing on Nov 21, Northvolt said it would try to sell Northvolt Systems Industrial, which makes batteries for industrial applications and sits within the unit called Northvolt Systems. Northvolt Systems’ main operations are in Poland, including the factory Northvolt Dwa.
The value of the business is not known, but Northvolt’s outgoing chief executive said last month it is one of its few businesses to make a profit.
The batteries are used in drill rigs and in construction to power machinery such as forklifts. Swedish mining equipment maker Epiroc and Finnish engineering group Konecranes are customers.
The company has had promising discussions with a “large industrial company,” which it did not name, for about two months around a potential sale, an internal announcement to staff on Nov 22, reviewed by Reuters, said. The memo’s contents have not previously been reported.
While talks were preliminary, the memo said it would seek to seal a deal in the coming weeks. If it does not find a buyer, it will have to close the business because Northvolt cannot afford to operate it beyond this year, it said.
Asked about the year-end deadline, a spokesperson from Northvolt Poland said: “We’re optimistic towards reaching a positive outcome, and that’s what we are focused on right now.” In the Chapter 11 filing, Northvolt also disclosed plans to wind down its energy storage business. —Reuters
