Funds managed by Goldman Sachs will write off nearly $900 million after Swedish battery maker Northvolt filed for bankruptcy this week, according to the FT.
Goldman’s private equity funds have at least $896 million of exposure to Northvolt, making the US bank the company’s second-largest shareholder. These funds will reduce the value of the investment to zero by the end of the year, according to letters to investors obtained by the Financial Times.
The losses mark a stark contrast to an upbeat forecast seven months ago by one of Goldman’s funds, which told investors that its investment in Northvolt was worth 4.29 times its initial investment and that that value would increase sixfold by next year .
Goldman said in a statement: “While we are one of many investors disappointed by this result, this was a minority investment by highly diversified funds. Our portfolios have concentration limits to mitigate risk.”
Goldman first invested in Northvolt in 2019 when, along with other investors including German automaker Volkswagen, it led a $1 billion Series B funding round that enabled Northvolt to build its first plant in the North Sweden and support future expansion.
The funding round was hailed by Northvolt CEO Peter Carlsson as “an important moment for Northvolt” — then a four-year-old start-up — and “a key moment for Europe” in its effort to counter Asian dominance in battery production.
But on Thursday, the former European battery hope filed for Chapter 11 bankruptcy in the US, and Carlsson resigned the next day, warning European politicians, companies and investors not to give up on the green transition.
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As of Thursday, the loss-making Swedish group — Europe’s best-funded private start-up after raising $15 billion from investors and governments — had just $30 million in cash, enough for a week of operations, and debts of 5.8 billion dollars.
On the same day, Goldman, which holds a 19% stake in Northvolt through various funds, told investors that it would reduce the value of its investments to zero.
(source: AFP)
Source: jurnalul.ro
