Sweden-headquartered battery developer and manufacturer Northvolt AB has filed for bankruptcy protection in the U.S. The company will seek to restructure under Chapter 11 of the bankruptcy code.

The company also announced that Peter Carlsson will step down as CEO and transition into a role as Senior Advisor. He will also continue to serve as a Member of the Board.

The Chapter 11 filings have been listed in the US Bankruptcy Court for the Southern District of Texas. The process will allow Northvolt access to new funding sources, including approximately $145 million in cash collateral.

Additionally, one of the company’s customers has committed to providing $100 million in new financing to support its business operations through debtor-in-possession (DIP) financing.

The company will continue to make deliveries to customers while fulfilling obligations to critical vendors and paying wages to employees.

The Chapter 11 restructuring process in the U.S. differs from a bankruptcy or administration proceeding in Sweden or many other countries.

Northvolt Ett, the company’s battery gigafactory in Skellefteå, Sweden, and Northvolt Labs in Västerås, Sweden, will remain operational to meet customer commitments.

Northvolt Germany and Northvolt North America, subsidiaries of Northvolt AB with projects in Germany and Canada, are financed separately and will continue to operate as usual outside of the Chapter 11 process as key parts of Northvolt’s strategic positioning.

In line with standard practice for Chapter 11 proceedings, the company has submitted several “first day” motions. These motions will enable the company to fulfill its obligations to employees, essential vendors, and customers and continue making payments for taxes, insurance, and utilities.

Northvolt is advised by Teneo as its restructuring and communications advisor. Kirkland & Ellis LLP, A&O Shearman and Mannheimer Swartling Advokatbyrå AB are legal counsels.

In January, Northvolt announced the signing of a $5 billion non-recourse project financing to expand its battery gigafactory in northern Sweden. The debt financing package included refinancing the $1.6 billion debt package that Northvolt raised in July 2020.

In 2023, Northvolt raised $1.2 billion in convertible notes to support its expansion plans across Europe and North America.