By Marie Mannes
STOCKHOLM (Reuters) - The owners of Northvolt voted to continue operations on Wednesday, the company said, while the Swedish electric vehicle battery maker scrambles to find new backers and funding in coming weeks.
Northvolt went from Europe's best shot at an EV battery champion to seeking bankruptcy protection last year as production problems, dwindling funding and competition from China took their toll.
Owners, including Volkswagen (ETR:VOWG_p) and Goldman Sachs, met in Stockholm to vote on whether to liquidate the group or allow the Chapter 11 restructuring overseen by a U.S. court to continue.
"This is a positive outcome that demonstrates the support of our shareholders as we seek to realise our ambition and maximise our value," the company said in a statement.
"Northvolt continues to make progress in the restructuring process while ramping production and executing on its transformation," it added.
Northvolt has received more than $10 billion in equity, debt and public financing since its founding in 2016.
At the time of its Chapter 11 filing in November the lithium-ion battery maker had 6,600 employees and debts of $5.8 billion, and only $30 million in cash. It said it expects to complete its restructuring by the first quarter.
Co-founder and recently departed CEO Peter Carlsson said the company needs to raise between $1 billion and $1.2 billion to restore its business. Those funds are likely to come from a mix both financial and strategic investors, and a combination of existing and new stakeholders, a person with knowledge of the situation said. The person was speaking on condition of anonymity because the matter is private.
A Northvolt spokesperson said the company would not comment on potential structures but said its talks with possible investors were ongoing.
Swedish firms are required by law to seek a mandate from shareholders to continue operations if their equity value is estimated to have dropped below half that of their registered share capital.
"We chose to vote in line with the Northvolt board's proposal as the company's operations continue," said a spokesperson at insurer Folksam, which has a 0.7% stake in the startup.
Folksam's focus is now on the outcome of the restructuring, the spokesperson added.
A Northvolt spokesperson had said in advance that the company expected owners to support the board's proposal to continue operations.
Northvolt entered the Chapter 11 proceedings with a $100-million loan from shareholder and customer Scania, and has said it expects to line up more financing by late January.
($1 = 11.1682 Swedish crowns)