Northvolt Six in Quebec and the CCAA proceedings

analysisNorthvolt's 2023 annual report states that, with the company's entry into Canada, a comprehensive federal and provincial support package of limited-recourse financing was provided for Northvolt Six, made up of grants, debt, convertible instruments and other contributions totalling $5.8 billion. Repayment was to be structured over time, a portion was subject to partial forgiveness contingent on specified milestones, and a segment of the debt was to be converted into shares; the report gives no breakdown and does not distinguish commitments from disbursements. The federal side is set out in a Question Period note of Innovation, Science and Economic Development Canada (ISED), received on 29 November 2024. It records that on 28 September 2023 Prime Minister Trudeau and Minister Champagne announced a Strategic Innovation Fund investment of up to $1.34 billion in Northvolt Batteries North America Inc. for an electric-vehicle battery facility on land spanning Saint-Basile-le-Grand and McMasterville, Quebec, and that Canada committed production incentives of up to C$4.6 billion, one third to be paid by the Quebec government, applying only to batteries produced and sold from the Canadian facility. The note states that, to that date, no support in any form had been disbursed to the company by the Government of Canada. It adds that Northvolt North America was not part of Northvolt AB's Chapter 11 filing and continued its operations, and that, as no federal disbursement had been made, ISED was not expected to be involved in the restructuring proceedings. ^{1 2}

analysisOn the provincial side, media reported on 17 April 2024 that Quebec's economy minister Pierre Fitzgibbon had told a parliamentary committee that Investissement Québec's stake in Northvolt's share capital was estimated at approximately 5% and consisted of a debenture convertible into ordinary shares. The ministry added that the 5% was an estimate of the current participation of the Fonds du développement économique through that debenture, and that the percentage on conversion could not be known because neither the timing of conversion nor the company's valuation at that time was known; the figure is an estimate, not a registered shareholding, and the instrument is a convertible debenture rather than issued shares. The same report said that Northvolt was to receive more than $7 billion in total from Quebec and Ottawa for its battery cell plant project in Montérégie, with Quebec contributing $1.5 billion in subsidies for cell production, $367 million in loans and $436 million in subsidies to help build the plant, and a further $567 million earmarked for an equity stake. These are media figures for commitments, not disbursements, and they differ in scope from the $5.8 billion package in Northvolt's annual report and from the federal amounts in the ISED note. Fitzgibbon conceded in the same session that the sums granted were large, but called the $436 million forgivable-loan subsidy for the plant's capital investment reasonable, said the government wanted a stake at the parent level to share in the whole venture, and called the project very bold on the government's part. On 2 September 2025 the Quebec government stated that it had disbursed $510 million in the project, a $240 million secured loan for the land and a $270 million subscription in the Swedish parent, and that the $270 million was lost; a federal briefing note received on 29 November 2024 records that no federal support had been disbursed to the company. ^{3 1}

analysisNorthvolt's Chapter 11 first-day declaration of November 2024 describes a loan agreement dated 31 October 2023 under which Investissement Québec lent CAD 240 million to MCMSB General Partnership, acting through its general partners 9500-9551 Québec Inc. and Northvolt Batteries North America Inc. (both also parties in their own capacity), to finance the acquisition of land for Northvolt Six. The loan bears fixed interest of 4.99%, is payable at maturity on 31 October 2038, is secured by the Canadian land, certain other assets and an equity pledge of the borrower, and is subject to project milestone requirements. The declaration puts the outstanding principal at the petition date at approximately $181 million, stated with a plain dollar sign although the facility is stated in Canadian dollars. The Quebec government later described the loan as a $240 million secured loan for the land purchase. ¹

analysisNorthvolt's 2023 annual report states that in 2024 the Mohawk Council of Kahnawake filed a lawsuit against the Quebec and Canadian governments for allegedly failing to consult adequately before approving construction of the Northvolt Six site, and that Northvolt was monitoring the situation and intended to keep working with the Mohawk Council despite the proceedings. When CCAA proceedings opened in September 2025, the initial order expressly extended the stay of proceedings to a proceeding instituted by the Mohawk Council of Kahnawà:ke against the debtor Batteries Northvolt Nord-Amérique inc. in court file no. 500-17-128547-240. The records reviewed do not show whether that file is the suit the annual report describes as directed against the two governments, or when the company became a defendant in it. In May 2026 the monitor reported that it had communicated with representatives of the Mohawk Council of Kahnawà:ke through counsel. ^{2 3 4}

analysisIn a release of 7 August 2025 Lyten stated that it was committed to pursuing the acquisition of Northvolt Six, then constructing a 15 GWh first-phase battery plant, and that it was actively progressing discussions with Northvolt North America, the Government of Canada, the Government of Québec and other local stakeholders; the records reviewed show no agreement between Lyten and the Canadian Northvolt companies. On 2 September 2025 the Quebec government announced that Christine Fréchette, Minister of the Economy, Innovation and Energy, was ending the government's financing of Northvolt Batteries North America in view of the end of the project to build an electric-vehicle battery plant in Saint-Basile-le-Grand and McMasterville. The minister said the company had not presented a satisfactory plan with regard to Quebec's interests and that the government was asserting its rights to recover the maximum of its investment. According to the release, the government had disbursed $510 million in the project, a $240 million secured loan for the purchase of the land and a $270 million subscription in the company's Swedish parent; the $270 million was lost, while the $240 million loan was backed by guarantees for its repayment. The Chapter 11 declaration and the CCAA records identify Investissement Québec as the lender under that land loan. CCAA proceedings were opened three days later, on 5 September 2025. ^{1 2}

analysisOn 5 September 2025 the Superior Court of Quebec (Commercial Division, district of Montreal), presided by Justice Janet Michelin, issued an initial order under the Companies' Creditors Arrangement Act (CCAA) on the application of Investissement Québec in respect of Batteries Northvolt Nord-Amérique inc. (Northvolt Batteries North America Inc.), 9500-9551 Québec inc. and Société en nom collectif MCMSB, and appointed Raymond Chabot Inc., a licensed insolvency trustee, as monitor; the court file is no. 500-11-066155-256. Media reported the same day that the judge had placed the company under creditor protection following a request from the province earlier that week (the court's order names Investissement Québec, the province's investment company, as applicant), that the company had laid off its entire workforce, and that the decision allowed it to rehire about 15 employees to maintain the site. The court approved the sale of the steel inventory on 11 March 2026, and the monitor's case page lists an order of 19 May 2026 on the extension of the stay and an interim distribution, for which the monitor had sought authority to pay Investissement Québec $15 million as partial repayment of its secured claim. ^{1 2}

analysisThe three debtors, for which the monitor's reports give the same Montreal place of business, 1007-606 rue Cathcart, had their proceedings consolidated under the single file for administrative purposes only, without consolidating their assets, property, debts or obligations, and the initial order stayed proceedings against them until 11 September 2025 inclusive. The court issued an amended and restated initial order on 11 September 2025. An order of 3 October 2025 extended the stay to 5 December 2025 and amended the initial order, and a separate order of the same day established a claims process; an order of 5 December 2025 extended the stay to 19 May 2026, and another order of that day authorised a sale and investment solicitation process (SISP). The monitor's public case page further lists approval and vesting orders of 11 and 13 March 2026 and an order of 19 May 2026 on an extension of the stay and an interim distribution, with grounds issued on 26 May 2026. ^{1 3 4}

analysisThe initial order provided that Investissement Québec's claims and rights against the debtors under any loan or other agreement, including the milestones agreement, would not be affected or compromised by the proceedings or any plan. IQ was to be treated as an unaffected creditor, was not subject to the stay and could enforce its security over the debtors' property, subject only to prior notice of its intention to do so. The order also granted an administration charge of up to $500,000 over the debtors' property, ranking ahead of all other security, to secure the professional fees of the monitor, the monitor's counsel (Blake, Cassels & Graydon), the debtors' counsel (Fasken Martineau DuMoulin) and IQ's counsel (McCarthy Tétrault). The monitor's fifth report later refers to an administration charge of $750,000 created under the amended and restated initial order. ^{1 5}

analysisThe monitor's amended creditor list for Batteries Northvolt Nord-Amérique inc., dated 5 November 2025, lists 126 creditors with declared claims totalling $67,504,050.07 (filed $1,305,655.99; admitted $722,520.82). Investissement Québec is the only secured creditor on the list, with $63,000,000 declared plus a second entry of $1.00; two municipalities appear as preferred creditors, of which the Ville de Saint-Basile-le-Grand had $183,182.21 filed and admitted; and 122 unsecured creditors have $4,504,049.07 declared. The largest declared unsecured amounts, $1,100,523.52 each, are listed for Northvolt AB, addressed for the attention of its bankruptcy trustee Mikael Kubu, and for Les Entreprises Michaudville Inc., neither of which had filed a proof of claim at the list date. The coincidence is in the list itself: both rows print $1,100,523.52, the 122 unsecured rows add up to the printed subtotal only with both included, and the list does not explain it. BMO Nesbitt Burns Inc. had filed $583,135.17 (status: to be reviewed) and Boston Consulting Group Canada ULC had $459,900.00 declared, filed and admitted. ^{1 2}

analysisBy the monitor's fifth report of 13 May 2026 the claims process had produced, in thousands of dollars, one approved secured claim of 64,894 and one secured claim of 16,524 under analysis, 39 approved unsecured claims totalling 4,177 and 2 unsecured claims of 1,014 under analysis: 43 claims totalling 86,609 overall. The monitor has also claimed funds held by Northvolt AB's bankruptcy trustee. On 1 April 2026, through its counsel, it sent the bankruptcy trustee of Northvolt AB a proof of property claim for $4.5 million held by the trustee in a separate account at Swedbank AB. According to the monitor, Batteries Northvolt Nord-Amérique inc. had originally transferred the sum to Northvolt AB so that Swedbank, Northvolt AB's bank, could issue a letter of credit in Northvolt AB's name in favour of the Canadian company under a contract concluded in August 2023 between the Canadian company and Siemens Canada Energy. The trustee was still analysing the claim at the time of the fifth report. ³

analysisAccording to the monitor's fourth report, the order of 3 October 2025 authorised the monitor to sell assets outside the ordinary course of business without court approval up to $250,000 per transaction or $1,000,000 in total, and the order of 5 December 2025 approved a sale and investment solicitation process. On 10 December 2025 the monitor launched two separate solicitation processes, one for the structural steel inventory and one for the land. The steel solicitation produced 14 offers by 20 February 2026 and two improved offers by 26 February 2026. The monitor, in consultation with Investissement Québec as principal secured creditor, selected the highest offer, from Compagnie Américaine De Fer Et Métaux inc., which covered all of the steel, carried no conditions and was payable in cash at closing; the offers and the price are in confidential annexes, and the monitor kept the financial advisers of Northvolt AB's bankruptcy trustee informed of the process. The steel sale went to the court for an approval and vesting order on an application of 5 March 2026, the date of the fourth report. The court approved the sale of the steel inventory held by Batteries Northvolt Nord-Amérique inc. on 11 March 2026 and the monitor closed the transaction on 13 March 2026. The monitor's fifth report records C$13,653 thousand received from sales of movable assets, the steel originally intended for building the plant, between 1 March and 8 May 2026, and C$14,048 thousand from movable-asset sales since 5 September 2025. ^{1 2 3}

analysisFor the land, according to the monitor's fifth report of 13 May 2026, the solicitation documents had been sent to 237 strategic real-estate buyers, 156 large companies, including players linked to the battery and electrical-components industries, and 32 commercial real-estate brokers. Phase 1 ended on 15 April 2026 with 10 non-binding offers, detailed in a confidential annex, and the monitor told 8 bidders that they qualified for Phase 2; no bidders or prices are disclosed. For Phase 2 the monitor proposed due diligence from 20 May to 30 September 2026, a deadline for binding offers on 30 September 2026, selection of a binding offer by 16 October 2026, finalisation of transaction documents by 30 October 2026, a hearing on an approval and vesting order on 6 November 2026 and closing on 30 November 2026, and it asked the court to extend the stay of proceedings to 30 November 2026. These are proposed target dates; the records reviewed do not show the result of Phase 2. ³

analysisThe media report of 5 September 2025 on the court's decision also said that Quebec was trying to recover the $240 million loan issued in 2023 for the purchase of the plant land, which it put at $260 million with interest. According to the report, the minister's office confirmed that nearly $200 million had already been recovered from Northvolt bank accounts frozen after the Swedish parent's bankruptcy, by exercising guarantees, leaving the province about $60 million short, and the government also wanted the land in Saint-Basile-le-Grand and McMasterville. The report added that the province had lost its $270 million investment in the Swedish parent and that Northvolt had received no binding offers by a 1 September deadline. These are media accounts of government statements; the amounts recovered are not documented in the court records reviewed. In the CCAA proceedings the monitor valued Investissement Québec's secured claim under the land loan at $64,894,035.13 as of 3 December 2025. In its fifth report the monitor, holding more than $23 million in trust, sought authority to pay IQ an interim distribution of $15 million as partial repayment of that secured claim under the 31 October 2023 loan agreement between IQ and Société en nom collectif MCMSB. It said it had obtained a legal opinion confirming the validity of IQ's security and that no charge or claim ranked ahead of IQ except the $750,000 administration charge. The monitor's case page lists an order of 19 May 2026 on the extension of the stay and the interim distribution; the order's text is not in the records reviewed. ^{1 2 3}

analysisThe monitor also reported on the condition of the site. On 6 March 2026 it received a notice of non-compliance concerning a discharge of water from the site into the environment with an aluminium concentration above the applicable standard and a pH below it; the report does not name the issuer of the notice. According to information the monitor obtained, the aluminium was reportedly attributable to contaminated soils left by the former chemicals, fertiliser and explosives plant operated on the site between 1878 and 1999, a problem already known to the debtors and the Quebec environment ministry (MELCCFP); the low pH was a first occurrence, and later analyses confirmed a return to compliant levels. Corrective measures proposed by the monitor's environmental consultant had been submitted to the ministry and were to be carried out in the summer of 2026. The monitor also reported unintentional spills from the site's water retention basin, caused by a breach in its wall, on 10 and 16 March 2026; in both cases the breach was sealed, the water sampled and the extent of the flow assessed, and an event report was sent to the ministry. ¹