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Northvolt Files for Bankruptcy in Sweden Amid Financial Struggles

Swedish battery manufacturer Northvolt has filed for bankruptcy in Sweden after failing to secure the financial conditions necessary to continue operations. A court-appointed trustee will now oversee the company's restructuring, including the sale of assets and settlement of obligations.

Northvolt had previously sought bankruptcy protection in the U.S. under Chapter 11, securing Rs 1,247 crore in cash collateral to support restructuring. However, rising capital costs, geopolitical instability, supply chain disruptions, and shifting market demand further weakened its financial position.

The bankruptcy filing includes Northvolt AB, NorthvoltEtt AB, Northvolt Labs AB, Northvolt Revolt AB, and Northvolt Systems AB, while Northvolt Germany and Northvolt North America remain unaffected. The court-appointed trustee will decide the fate of its subsidiaries in consultation with lenders.

Despite financial struggles, Northvolt had secured Rs500 crore in non-recourse project financing in early 2024 to expand its NorthvoltEtt gigafactory in Sweden, marking one of Europe's largest green loans. The future of Northvolt's technology and production facilities now depends on the Swedish bankruptcy process.