Future of the battery factory in Dithmarschen: Hope despite bankruptcy!

Future of the battery factory in Dithmarschen: Hope despite bankruptcy!

In Schleswig-Holstein, the future of the planned battery factory of Northvolt remains uncertain after the Swedish battery manufacturer has been awarded bankruptcy. According to the state minister of the state, Claus Ruhe Madsen (CDU), there is still hope for a positive development. Madsen plans to meet insolvency administrator Mikael Kubu in Stockholm on Friday to discuss the perspectives for Northvolt Deutschland GmbH, which drives the construction of the factory in Dithmarschen.

Kubu is actively looking for investors to ensure the further progress of the project. The state sponsoring bank KfW, which Northvolt has already transferred 600 million euros for the construction of the factory, plays a crucial role here. However, only parts of this funding have been released so far, and the payment is only made when applying and corresponding construction progress. Both Schleswig-Holstein and the federal government have each planned 300 million euros for the KfW, whereby the state government may ultimately be obliged to transfer 300 million euros, even if the money has not been flowed so far.

financial difficulties by Northvolt

Northvolt struggles with considerable financial difficulties and has debts of almost six billion US dollars. Despite these problems, the company, which has submitted an application for a renovation procedure under US insolvency law (Chapter 11), continues the construction of the new factory in Dithmarschen. In a first hearing on December 20, 2024, the procedure has not yet been opened, but the creditors, including Volkswagen and KfW-Förderbank, are behind the Chapter 11 application.

The KfW change bond of 600 million euros is half secured by the federal government and half of Schleswig-Holstein. Experts estimate that the demands of the creditors, including the KfW, could be significantly reduced as part of the renovation process. The State Parliament of Schleswig-Holstein unanimously approved the guarantee for this convertible bond. An auditing company currently sees the risk of a total failure of the bond (1%).

While Northvolt currently has a “cash burn rate” of around $ 30 million a week and is looking for new donors, in the second half of 2024, production problems in the main work in northern Sweden was made aware of, which further tightened the situation. The governments of the federal and state governments hope that Northvolt will complete the battery factory in Schleswig-Holstein as part of the efforts to reduce the dependence on Asian battery deliveries. Overall, the governments plan to support Northvolt with around 700 million euros in direct funding, which, however, depend on the progress of the project.