Goldman Sachs faces major losses

Goldman Sachs, a major investor in Swedish battery maker Northvolt, has announced it will write off nearly $900 million following the company's Chapter 11 bankruptcy filing.  

Goldman’s private equity funds hold at least $896 million in exposure to Northvolt, making the US bank its second-largest shareholder, Caliber.Az reports, citing foreign media.

According to investor letters seen by the Financial Times, the funds will write down their investment to zero by the end of the year. This loss stands in stark contrast to a highly optimistic forecast made just seven months ago, when one of Goldman’s funds told investors that its Northvolt investment was worth 4.29 times what it had paid, with expectations it would grow to six times its value by the following year.

Goldman Sachs stated: "While we are one of many investors disappointed by this outcome, this was a minority investment through highly diversified funds. Our portfolios have concentration limits to mitigate risks." 

Goldman first invested in Northvolt in 2019, leading a $1 billion Series B funding round alongside other investors, including German carmaker Volkswagen. The round enabled Northvolt to build its first factory in northern Sweden and support its future expansion.

Northvolt's CEO, Peter Carlsson, called the funding round "a great milestone for Northvolt" — then a four-year-old start-up — and "a key moment for Europe" in its effort to challenge Asia's dominance in battery production. 

However, Europe's once-promising battery venture filed for Chapter 11 bankruptcy in the US, and Carlsson resigned the following day, urging European politicians, companies, and investors not to back away from the green transition.

By Naila Huseynova