Denmark’s biggest pension fund, ATP has been left facing the painful consequences of “green” darling Northvolt’s feared bankruptcy – €308 million is on the line.
ATP’s CEO Martin Præstegaard admitted the Danish pension giant had invested heavily in the Swedish battery manufacturer that filed for bankruptcy protection on November 21 but said the value of that investment was now “close to zero”.
Speaking to Danish public broadcaster DR on December 16, Præstegaard admitted, for the first time, that a significant amount of Danish pension money had all but evaporated.
ATP is one of the largest shareholders in Northvolt, with a stake of about 5 per cent, and had invested 2.3 billion Danish krone in the battery company, or about €308 million.
Now, the value of that holding “probably won’t be very far from zero,” Præstegaard said, stopping short of giving a specific amount for the write-down.
“By far most of the investment is gone,” he added.
By principle, ATP has never disclosed what its investments were worth, because it buys and sells on an ongoing basis.
“It’s really stupid to tell those you negotiate with what you think it’s worth from the start,” Praestegaard said.
” You can see and read about Northvolt out in public. And it probably doesn’t take much imagination to imagine that we don’t consider it worth a lot today.”
Præstegaard said ATP had learned from the failed Northvolt venture. “Among other things, you have to be extra careful about throwing large amounts of money at new companies that require very heavy investments to get started,” he said.
Swedish EV battery maker Northvolt has filed for Chapter 11 bankruptcy protection in the US while seeking additional funding, with CEO Peter Carlsson resigning shortly after. https://t.co/dGUOJf3cDH
— Brussels Signal (@brusselssignal) November 22, 2024
Asked for specific details, Mikkel Svenstrup, investment director at ATP, later told journalists: “If you look at how the course and process around Northvolt has developed, it does not take much imagination to imagine that the investment is not worth much at this time.”
ATP, also known as the Labour Market Supplementary Pension, was introduced in 1964 to supplement the State pension.
All wage earners over 16 years old contribute to ATP through their employer. Full-time employees pay 99 krone, about €13 per month, while employers contribute twice that amount. The pension is paid out monthly once state pension age is reached and continues for life.
The organisation invests most funds in relatively safe securities, with a smaller portion allocated to higher-risk investments, such as those in companies including Northvolt.
Other Danish pension funds, PFA and Danica, each have given loans worth over 800 million krone (€107 million) but declined to be interviewed.
US bank Goldman Sachs, the second-largest shareholder with an exposure of at least $896 million (€853 million) to Northvolt, said it planned to write down its stake to zero by the end of 2024, the Financial Times reported on November 23.
The bankruptcy of Swedish battery developer and manufacturer Northvolt is set to cost the European taxpayer a hefty sum. https://t.co/4PRhvG5ExG
— Brussels Signal (@brusselssignal) November 26, 2024
