The extraordinary general meeting was convened in December after it became evident that the company's equity had plummeted to minus 29.5 billion kronor. Shareholders were presented with two options: to continue operations or to liquidate the company – selling off all assets, settling as much debt as possible, and then ceasing operations. It has now been confirmed that shareholders chose to follow the board's recommendation to continue operations.
"This is a positive outcome that reflects the support of our shareholders as we strive to achieve our ambitions and maximise our value," wrote communications director, Matti Kataja.
Marie Karlsson Tuula, Professor of Civil Law at Linnaeus University and an expert in bankruptcy, said she would have been surprised if shareholders had voted for liquidation.
– That would have been akin to self-sabotage, considering the significant investments made and the ongoing chapter 11 proceedings, she stated.
According to Tuula, the extraordinary general meeting is largely a formality, a necessary step when a company's equity has been substantially depleted.
– Shareholders must decide how to proceed, as the primary objective is to protect creditors from further financial detriment. If they had not taken this step, they would have risked facing forced liquidation,' she explained.
Forced liquidation can be initiated by the court or the Swedish Companies Registration Office when a company fails to comply with legal requirements, such as depleted equity or the absence of a qualified board of directors.
Today's vote by Northvolt's shareholders addressed voluntary liquidation, which would have involved the company making the decision to cease operations. However, this was not the outcome.
Instead, operations will continue, and the restructuring process in the bankruptcy court in Texas will move forward. When the Chapter 11 bankruptcy application was filed in November, the company faced a severe financial crisis, with debts amounting to 60 billion kronor and cash reserves projected to last only one week.
During the restructuring process, the company secured 2.5 billion kronor, partly through a $100 million loan from Scania and $145 million from previously restricted collateral.
However, these funds are anticipated to be exhausted by the end of January or early February. Additional capital will be crucial to continue the restructuring process, which is expected to be finalized later this spring.
"Northvolt continues to make progress in its restructuring process while simultaneously increasing production and advancing its transformation," wrote Matti Kataja.