A new company closing often happens. But it is rare for a young company to leave a portfolio valued at more than 10 billion euros. The bankruptcy of the Swedish Northvolt, the European leader in batteries for electric cars, which was placed under US bankruptcy protection on Thursday, November 21, has sent shivers through economic circles: many fear that, after such a fiasco, investors will become more reluctant to finance projects linked to the energy transition in Europe.
“Northvolt is, above all, the failure of an overly ambitious operator who wanted to control everything in the battery chain. “Investors will be able to notice the difference compared to more realistic and better controlled projects”Moderated by Thierry Déau, founder and CEO of the infrastructure fund Meridiam, one of the main supporters of the Verkor gigafactory in Dunkirk (North), which had raised €2 billion in September 2023: “But that discourages”recognizes the financier.
Of the $14 billion (€13.3 billion) in equity, loans and grants raised by Northvolt since its founding in 2016, the majority comes from private equity. A large part comes from Swedish and German industrial partners. The car manufacturer Volkswagen, the largest shareholder in the Swedish start-up with 21% of the capital, had valued this stake at the end of 2023 at around 700 million euros: now it is worth almost nothing.
Disappointment
Because if the fallen king of electric batteries hopes to rise from the ashes after a financial restructuring, its current shareholders risk losing everything. For the pension or private equity funds around the world that had supported the massive capital raisings of the extraordinary project, the disappointment is all the greater since, a year earlier, an IPO was anticipated, with a valuation of 20 billion dollars.
First blow, Goldman Sachs had bet heavily on Northvolt since 2019, through several envelopes of investment capital – that is, using its clients’ money – until it became the second shareholder: on Saturday, the Financial times revealed that the American bank had announced to the investors of these funds its intention to almost completely redeem their securities, that is, almost 900 million dollars erased. Seven months ago, the Wall Street firm assured that this investment was worth more than four times what was bet…
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