Sweden

More than 700 Swedish companies went bankrupt in September, with real estate companies among the hardest hit, according to data from credit reference agency Creditsafe, Bloomberg News reported. The 17% increase from last year is a sharp turn for the worse, following a 3% annual decrease in August. Property owners had another rough month, as bankruptcies in the sector more than doubled. While hopes have increased about an economic recovery in Sweden as the central bank has reduced borrowing costs, an uptick in sentiment has yet to translate into rising activity.

Sweden’s central bank cut its key interest rate for the third time this year and said borrowing costs will likely be lowered again soon as a faltering economy threatens to push inflation further below its target, the Wall Street Journal reported. The Riksbank cut its key rate to 3.25% from 3.5%, in line with a poll of economists conducted by The Wall Street Journal ahead of the decision. “If the outlook for inflation and economic activity remains unchanged, the policy rate may also be cut at the two remaining monetary policy meetings this year,” the Riksbank said.

Sweden’s Northvolt AB will shed 20% of its global workforce and pause its expansion plans to slow cash outflows as the battery-making firm confronts a burgeoning financial crisis, Bloomberg News reported. The company, which has struggled in its mission to stand up a home-grown supply of electric-vehicle batteries in Europe, said it will reduce its Swedish workforce by 1,600 positions as part of a strategic review that was announced this month. The money-saving move comes as Northvolt continues to negotiate a new financing pact with its creditors and investors.

Lenders to Northvolt AB have selected investment bank PJT Partners to help advise on options as a cash crunch deepens at the troubled maker of electric-car batteries, Bloomberg News reported. While there are no restructuring talks under way, PJT will work alongside law firm Milbank LLP, which was already a lender adviser, the people said, asking not to be named discussing private information. Creditors are preparing for a range of scenarios at the Swedish manufacturer.

The number of bankruptcies in Sweden declined on year last month, for the first time since July 2022, according to data from credit reference agency Creditsafe, Bloomberg News reported. The 3% drop in defaults in August comes as falling borrowing costs have helped fuel optimism about an economic recovery in the Nordic region’s largest country.

Swedish group Holmbergs Safety Systems, controlled by investment fund FSN Capital – a major investment firm in northern Europe, has filed a request for the insolvency of its subsidiary in Romania, which it set up in 2020 by taking over Te Rox Prod from local entrepreneur Doina Cepalis with plans to turn it into a major production hub from where the products will reach the markets of Europe, the US, and Asia, Romania-Insider.com reported.

Sweden’s Riksbank is more likely than not to take its benchmark rate below 3% before the end of the year, Governor Erik Thedeen reiterated, as the country’s economy is treading water and the central bank is increasingly confident that inflation will remain near its target, Bloomberg News reported. Last month, the Swedish central bank lowered its key rate to 3.5% from 3.75% and said it expects another two or three similarly-sized cuts before the end of this year. Data released since then hasn’t changed Thedeen’s view that the latter option is more probable.

After a two-year-long bankruptcy process, Scandinavia’s flagship airline SAS AB is now under the ownership of Air France-KLM and private equity firm Castlelake LP, with former Novo Nordisk A/S executive Kare Schultz at the helm of its new board, Bloomberg News reported. The move comes amid much overdue airline consolidation in Europe in the wake of the Covid-19 pandemic, and a recent slowing in travel demand. It will also shore up Air France-KLM’s position in the Nordics, a reliable source of active travelers.

Sweden’s major banks pose a vulnerability to the financial system due to their exposure to “highly-indebted property companies,” according to minutes from the Riksbank’s policy meeting earlier this month, Bloomberg News reported. The property risks are mainly operational, for example from elevated and still rising levels of vacancies in the office segment, as well as a high rate of bankruptcies in the near term, Olof Sandstedt, the bank’s head of financial stability, said in the statement. “This means that there is still a risk that the banks’ loan losses may increase,” Standstedt said.

Twenty-five years after a group of friends decided to get into the whisky business during an apres-ski hot tub party, Sweden’s Mackmyra Distillery has filed for bankruptcy, WhiskyCast.com reported. The petition was filed yesterday in Gävle District Court, with a trustee to be appointed soon. In a statement on the Mackmyra web site, chairman Petter Ski said that the decision to shut down the distillery was not an easy one. “It is with great sadness that we must state that it is unfortunately not possible to continue the company’s operations," Ski said.