By Marie Mannes
STOCKHOLM (Reuters) – Northvolt has held talks with an enormous industrial firm on promoting the enterprise that makes electrical battery packs for heavy trade, as a scarcity of funds forces it to attempt to divest one in all its few worthwhile operations by the year-end, an inside memo exhibits.
The frenzy to promote is the Swedish firm’s newest effort to strengthen its funds and shrink the enterprise to deal with battery cell manufacturing, reasonably than being an all-in-one-shop for making and recycling electrical automobile (EV) batteries.
Final month, Europe’s largest hope for an EV battery champion filed for U.S. Chapter 11 safety after talks to boost more money from stakeholders failed.
It wants as much as $1.2 billion in exterior long-term funding.
In its Chapter 11 submitting on Nov. 21, Northvolt stated it might attempt to promote Northvolt Techniques Industrial, which makes batteries for industrial purposes and sits throughout the unit known as Northvolt Techniques.
Northvolt Techniques’ foremost operations are in Poland, together with the manufacturing unit Northvolt Dwa.
The worth of the enterprise is just not recognized, however Northvolt’s outgoing CEO stated final month it’s one in all its few companies to make a revenue.
The batteries are utilized in drill rigs and in development to energy equipment comparable to forklifts. Swedish mining gear maker Epiroc and Finnish engineering group Konecranes (HE:) are prospects.
The corporate has had promising discussions with a “giant industrial firm,” which it didn’t identify, for about two months round a possible sale, an inside announcement to workers on Nov. 22, reviewed by Reuters, stated.
The memo’s contents haven’t beforehand been reported.
Whereas talks had been preliminary, the memo stated it might search to seal a deal within the coming weeks.
If it doesn’t discover a purchaser, it must shut the enterprise as a result of Northvolt can’t afford to function it past this yr, it stated.
Requested in regards to the year-end deadline, a spokesperson from Northvolt Poland stated: “We’re optimistic in the direction of reaching a optimistic final result, and that is what we’re targeted on proper now.”
Within the Nov. 21 Chapter 11 submitting, Northvolt additionally disclosed plans to wind down its power storage enterprise that can be a part of the Northvolt Techniques unit.
The enterprise makes merchandise for storing extra energy for later use.
REVERSAL
The choices for the 2 companies had been taken independently of the Chapter 11 course of, the corporate stated within the memo.
Offered the gross sales go forward, Northvolt’s enterprise could be largely diminished to its battery manufacturing unit in Skelleftea in northern Sweden and its R&D facility in Vasteraas, near Stockholm.
They’d mark a reversal of a earlier plan outlined on Sept. 9 when Northvolt stated it might search for strategic companions for the power storage enterprise.
The spokesperson stated on Tuesday it had been unable to seek out buyers.
Closing the power storage enterprise will lead to about 130 redundancies in Poland, the corporate instructed Reuters.
Northvolt’s plans for 2 battery factories in Germany and Canada are prone to be delayed, the corporate has stated in latest weeks.
CUSTOMERS WATCHING
Epiroc stated it might consider the scenario in nice element if the economic battery enterprise was bought to a 3rd social gathering.
“We’d need to guarantee (…) that the batteries would proceed to have the identical top of the range that we’ve thus far skilled, and in addition that well timed supply of the batteries could be safeguarded,” Epiroc stated.
It declined to touch upon whether or not it was in talks to purchase the enterprise. Konecranes stated that it had not mentioned shopping for it.
Whereas exiting the battery storage sector would scale back prices, Northvolt would lose out on a doubtlessly profitable market, battery analysts stated.
Battling slower than anticipated demand for electrical autos, some battery makers have targeted on this market, tapping rising demand from governments and firms wanting to make use of storage to guard in opposition to excessive power costs, Andy Palmer, founding father of consultancy Palmer Automotive stated.
“Northvolt undoubtedly stretched itself too large, however may rue the day it exits from this (…) market,” Palmer stated.