Goldman Sachs Asset Management is preparing to write down nearly $900 million of investments related to Swedish battery maker Northvolt AB, which this week filed for Chapter 11 bankruptcy protection in the US, the Financial Times reported.
Details of the financial impact
Full write-down : Goldman's private equity funds, with at least $896 million of exposure to Northvolt, said losses would be fully recognized by year-end.
Official statement : Goldman explained that this investment represented a minority stake in highly diversified funds, designed with concentration limits to mitigate risks.
Second-largest shareholder : Goldman's stake made it Northvolt's second-largest shareholder.
Rescue attempt fails
Goldman led a group of investors seeking to rescue Northvolt after months of negotiations with owners, customers and creditors. However, the efforts came to nothing, leaving the company with just a week's worth of cash on hand.
Northvolt context
Northvolt, renowned for its innovation in battery manufacturing, faced financial difficulties that led it to restructure under U.S. bankruptcy laws. Its collapse highlights the challenges inherent to companies in the technology and energy sectors, especially in an uncertain economic environment.
Conclusion
Goldman Sachs' loss underlines the risks associated with investing in emerging sectors such as batteries. Despite diversification measures, Northvolt's situation reflects the financial sustainability challenges faced by many innovative companies.