In a bid to stabilize its financial situation, Northvolt, a Swedish company specializing in electric battery technology, is actively seeking to sell its profitable electric battery pack business, Northvolt Systems Industrial, by the end of the year, Reuters reported today.
This division, known for producing battery packs for heavy industry applications, is one of the firm's few profitable ventures. The company is currently in discussions with an undisclosed large industrial company regarding a potential sale, as revealed by an internal memo dated November 22.
Northvolt, which has positioned itself as Europe's leading contender in the electric vehicle (EV) battery market, has recently filed for Chapter 11 protection in the United States on November 21, after unsuccessful attempts to secure additional funding from stakeholders. The company has identified a need for up to $1.2 billion in external long-term funding to maintain operations.
The business unit in question, Northvolt Systems Industrial, operates primarily out of Poland, including the Northvolt Dwa factory. The unit's batteries are integral to powering heavy machinery such as drill rigs and forklifts, with companies like Epiroc and Konecranes (HE:KCRA) among its clientele.
Despite the profitability of this segment, Northvolt's outgoing CEO acknowledged last month that the company needs to streamline its focus on battery cell production and move away from its initial model of being an all-encompassing provider for manufacturing and recycling EV batteries.
The internal announcement indicated that while the sale discussions have been ongoing for approximately two months, they are still in the preliminary stages. However, the company aims to finalize a deal within the coming weeks. If a buyer is not secured, Northvolt faces the prospect of shutting down the business, as it cannot afford to sustain it beyond the current year.
In addition to seeking a buyer for the battery pack operation, Northvolt's Chapter 11 filing also included plans to wind down its energy storage business, which is part of the same Northvolt Systems unit. This division focuses on creating solutions for storing excess electricity for future use.
A spokesperson for Northvolt Poland expressed optimism about reaching a positive resolution, emphasizing the company's current focus on achieving a favorable outcome.
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