Sweden

Germany will assume more than €600 million ($629 million) of debt that its development bank extended to Northvolt AB for the construction of a battery plant in the country, Bloomberg News reported. The federal government will this month reimburse lender KfW for the value of a convertible bond and related costs, a spokesman for the economy ministry said in an emailed response to questions from Bloomberg. Privately-held Northvolt filed for bankruptcy protection in the US last month after a desperate bid to secure rescue funding fell short.

For Northvolt AB, the Swedish startup that became a poster child for Europe’s electric-driving future, the route to collapse started in June when BMW AG canceled a multi-billion-dollar order, Bloomberg News reported. Back then, few saw the significance of the move, which effectively started a countdown that would culminate in a Chapter 11 filing less than six months later. Northvolt scrambled to keep the financing flowing, but as Germany’s car industry fell deeper into its own crisis, it became clear orders would dry up.

Northvolt's CEO and co-founder Peter Carlsson stepped down on Friday, a day after Europe's biggest hope for an electric vehicle battery champion filed for U.S. chapter 11 bankruptcy protection, Reuters reported. The Swedish maker of battery cells went in a matter of months this year from being Europe's best shot in a vital industry for the energy transition to racing to stay afloat, hobbled by production problems and dwindling funds. Its collapse deals a big blow to Europe's hopes of reducing its auto industry's reliance on Chinese battery suppliers such as CATL and BYD.

Sweden’s Northvolt AB hired restructuring expert Paul O’Donnell to oversee its main factory unit, as time runs short for the struggling battery maker to mend its finances outside of bankruptcy court, Bloomberg News reported. O’Donnell, who has helped Thames Water engage with creditors, will become chairman of Northvolt Ett AB, the subsidiary that contains the flagship cell-manufacturing plant in northern Sweden. Northvolt has struggled to raise $300 million in emergency funding, with Bloomberg News reporting on Friday that talks on the package were on the verge of collapse.

Swedish debt collector Intrum is asking a U.S. bankruptcy court to help reduce its debt, but will have to overcome a group of bondholders who allege it is misusing chapter 11, WSJ Pro Bankruptcy reported. After Intrum filed for bankruptcy in Houston on Friday, creditors holding some of its bonds due in 2025 asked for the chapter 11 case to be dismissed. The bondholders say the company manufactured its bankruptcy venue by creating a U.S. affiliate last month, six days before seeking creditors’ votes on its restructuring plan, according to papers filed by the bondholders with the U.S.

The Swedish government does not plan to take a stake in battery maker Northvolt, Sweden's Minister for Energy, Business and Industry and Deputy Prime Minister Ebba Busch told Reuters on Tuesday. The statement echoed that of Prime Minister Ulf Kristersson who has also said the government does not plan to invest in the cash-strapped battery maker. "There are huge investments happening in the green transition in Sweden whether or not the Northvolt project gets fully completed or not," Busch told Reuters.

Intrum, Europe's biggest debt collector, on Friday said that it had filed for chapter 11 bankruptcy in the United States in a bid to restructure its debt, Reuters reported. The company has struggled as the pandemic, an energy crisis and two-decade-high interest rates failed to unleash a wave of loan defaults, with concerns mounting over Intrum's net debt, which reached 49.4 billion Swedish crowns ($4.49 billion) at the end of September.

Swedish battery maker Northvolt has been discussing the possibility of bankruptcy protection in the United States as one of several options for the cash-strapped company to survive, two people with knowledge of the matter told Reuters. Northvolt has in recent months gone from being Europe's best shot at a home-grown electric vehicle battery champion to racing to stay afloat by slimming down, hobbled by production problems, the loss of a major customer and trouble raising more cash.

Sweden’s Riksbank cautioned that loosening requirements on mortgage amortization could lead to increased stability risks, pushing back against a proposal intended to make it easier for first-time buyers to enter the housing market, Bloomberg News reported. The warning from the central bank comes after a government-appointed inquiry advised that households be allowed to pay down less on mortgages exceeding 70% of the value of the home. The so-called macroprudential rules were introduced in the wake of the global financial crisis amid concern over rising house prices and ballooning debt.

Cash-strapped battery maker Northvolt AB is working on a plan to raise more than 10 billion kronor ($920 million) to continue its operations beyond the immediate horizon, according to its chief executive officer, Bloomberg News reported. “In the long term we need to secure a capitalization of somewhat north of 10 billion kronor in the coming year,” CEO Peter Carlsson told reporters after a seminar in Stockholm on Wednesday.