Goldman Sachs’ private equity funds are set to write off nearly $900 million after Swedish lithium-ion battery maker Northvolt filed for Chapter 11 bankruptcy earlier this week, according to the Financial Times.
Goldman, the second-largest shareholder in Northvolt, will reduce its $896 million investment to zero by the end of the year, as revealed in letters to investors. The firm commented, “While we are disappointed by this outcome, this was a minority investment in highly diversified funds, with portfolio limits in place to manage risks.”
Northvolt, once seen as Europe’s key player in the energy transition, has struggled with production issues and financial troubles in recent months. The company’s CEO and co-founder, Peter Carlsson, resigned on Friday, one day after filing for bankruptcy.
Founded to build Europe’s largest lithium-ion battery plant, Northvolt had raised $1 billion in equity funding in 2019, led by Germany’s Volkswagen and Goldman Sachs. However, the company’s rapid decline highlights the risks in this critical industry for the clean energy future.
Northvolt did not respond to requests for comment.
This development serves as a stark reminder of the challenges facing ambitious projects in renewable energy, as firms navigate production hurdles, funding shortages, and heightened competition in a rapidly evolving market.