By Anousha Sakoui, Christina Amann and Marie Mannes
LONDON/BERLIN/STOCKHOLM (Reuters) – Northvolt is in talks with investors and lenders to secure about 200 million euros ($218 million) in short-term funding, three sources familiar with the matter said, as the Swedish maker of batteries for electric vehicles seeks to stabilise its finances.
The talks have been taking place this week, one of the sources said, adding that the company still aims to raise a larger amount of capital for the long-term. The sources declined to be identified because the matter is confidential.
On Friday, Northvolt repeated a statement from Sept. 24 that said it had made significant progress in recent weeks in its effort to raise cash. It declined to comment further.
Northvolt has gone in a matter of months from being Europe’s best shot at a homegrown electric-vehicle battery champion to racing to raise funds.
A second source said it was unclear how long the new funding being discussed could sustain the lithium-ion battery maker, but that it would not be enough in the long term.
Late on Thursday, Northvolt said it would be able to pay 287 million Swedish crowns ($27.59 million) of taxes that fall due on Monday. Reuters had earlier reported that it was seeking to sell redundant battery materials to raise cash.
Last month, the company said it would slim down and cut jobs after struggling with production problems, sluggish demand and competition from China.
New short-term funding could be made up of a mix of pre-orders from customers for batteries as well as loans as shareholders, customers and lenders all discuss forms of support, the first source said.
That source and a third person said there is a verbal agreement for 150 million euros in funding, but a final deal has not yet been agreed.
The sums involved are much smaller than the 15 billion Swedish crowns ($1.44 billion) that Swedish media had reported Northvolt was looking for a few months ago, or the 7.5 billion crowns it was reported to be seeking last month.
A fourth source with direct knowledge of the matter said there had been weekly meetings at which the sum Northvolt was asking for gradually decreased.
SCANIA, BMW (ETR:)
Truckmaker and Northvolt shareholder Scania is spearheading the talks, the first source said. The second source confirmed that Scania plays a role in the discussions.
Scania said it is “in close dialogue” with Northvolt, but did not comment further.
German auto maker BMW, which cancelled a $2 billion order earlier this year, is not involved in the fundraising, the third source said.
A BMW spokesperson said it had no plans to change its 2.8% stake in Northvolt but declined to comment further.
Despite being a leader in the industry, Northvolt has struggled to produce high-quality batteries in enough volumes, leading to BMW walking away from its big order and delays of EV ramp-up at Traton’s Scania.
A spokesperson for the German economy ministry said on Friday that Northvolt had confirmed its commitment to building a factory at Heide in northern Germany with EU-approved state aid.
“The current problems with the ramp-up are more directly caused by the Swedish company … Therefore, the question of German support for the Heide project with subsidies does not arise,” the spokesperson said.
Founded in 2016, Northvolt has over the years received more than $10 billion in equity and debt financing from players including Volkswagen (ETR:), Goldman Sachs and Blackrock (NYSE:), filings show.
Prime Minister Ulf Kristersson in September ruled out the Swedish government taking a stake in the company.
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