This week he believed in bankruptcy within six months. Now Christian Sandström, assistant professor at the International Business School in Jönköping, is even more pessimistic. Northvolt’s move to stop all expenses and travel contributes to Sandström’s analysis that a reconstruction may be at the door.
– It would be an environmental, human and financial disaster.
Financial crisis for Northvolt
“Northvolt in a sensitive and critical situation”
Total stop for travel and expenses on Northvolt
– I hope I’m wrong. In the short term, the company can live via an urgent injection of capital, but I have no answer as to where the capital will come from.
He sees last year’s growing losses as the tipping point – that’s when things started to go wrong for Northvolt. He was surprised when the annual report for 2023 came and showed a major loss of SEK 12.5 billion, compared to SEK 3 billion the year before.
– The company is badly managed and the management needs to be replaced, just look at the numbers. In addition, there are the problems with the working environment and a management that seems to hide and not answer questions. Peter Carlsson may not be suitable for the role as CEO.
“Bankruptcy can be judged to be better”
Magnus Henrekson, professor of economics, believes that the losses have continued at the same pace this year as in 2023 and sees clear signs of a serious liquidity crisis. He believes that it is not certain that a reconstruction is possible for Northvolt.
– Reconstruction should only be used for a company that has an opportunity to reverse the trend and it is not certain that it is considered possible here. Then it can be judged that a bankruptcy is better so that a new owner with better competence in building batteries can quickly come in.
Even if Northvolt reverses the trend, Christian Sandström believes that the fierce competition in the global battery market makes the future uncertain for Northvolt.
– Even if production at the factories were to start at full capacity, it does not guarantee that the company will be viable.
Need money for salaries
The business journalist Gabriel Mellqvist believes that it is in a hurry for Northvolt to negotiate for more money and that it may be necessary to cover the month’s salary payments.
– Otherwise, you may have to go into a reconstruction process in an attempt to write off debts and rearrange the ownership image. If that doesn’t work, bankruptcy threatens.
SVT Nyheter has requested an interview with CEO Peter Carlsson. Northvolt has asked to come back on that later.
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“Now it’s make it or break it” – SVT’s economic commentator Alexander Norén on the crisis for Northvolt. Photo: Magnus Lejhall/TT, SVT
Reconstruction
It is the district court that decides on possible restructuring when a company has problems paying its debts in the short term, but in the longer term still has a viable business.
It can be an alternative to bankruptcy for companies that have found themselves in financial problems but are judged to be able to survive in the long term.
During the time that the reconstruction is in progress, the company gets the chance to reshape and rebuild the business.
Source: Sweden’s Courts