Stegra Secures Crucial Funding as Wallenbergs Step Up, DI Says

Article content(Bloomberg) — Ailing Swedish startup Stegra AB has secured funding commitments from the influential Wallenberg family in a rescue package that will help the company complete the world’s biggest green-steel plant and ensure it stays in business, Dagens Industri reported.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentA group of investors led by the Wallenbergs are committing 7 billion Swedish kronor ($755 million) to 8 billion kronor of a total 15 billion kronor in fresh funding, making the family the company’s biggest shareholder, DI said on Sunday, citing sources it didn’t identify.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentIt means Stegra will now have access to around 25 billion kronor to invest in the continued construction of the mammoth facility, located in Boden, Sweden, the newspaper said. While Stegra’s lenders aren’t committing any fresh funds, they will permit the company to draw from about 10 billion kronor in pre-committed loans, money that had been frozen since the beginning of the year, DI said.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentThe deal caps months of fraught negotiations with shareholders and lenders, providing a lifeline for the six-year-old company and its ambitious plans to shape a green-tech transition in Sweden’s far north. The struggle to raise financing is a reflection of souring sentiment for climate-friendly industrial projects that contributed to Swedish battery maker Northvolt AB collapsing last year. Article contentIn the years leading up to the cash crunch, Stegra raised about €6.5 billion ($7.6 billion) in a mix of debt, equity and public grants. The company is one of several new steelmakers seeking to remodel one of the most polluting industries in the world, and is seen as a bellwether for the sector’s green transition. It’s building its first plant in the very north of the country, close to where Northvolt attempted to make batteries for electric vehicles.Article contentArticle contentIn October, Stegra said it was seeking up to €975 million in new financing to cover higher-than-expected project costs, fund infrastructure and fill a gap left by delays to state grant support. The following month, Sweden’s Energy Agency said it would award the company 390 million kronor in public grant money, provided it could secure enough funds by spring of 2026 to complete the project.Article contentSeveral minority shareholders, including Hitachi Energy, earlier told Bloomberg that they wouldn’t commit fresh funds to the project, putting pressure on the company to find new sources.Article contentIn March, Bloomberg reported Stegra was targeting new equity investors and was negotiating with banks to unlock credit lines.Article contentOn the lending side, a group of banks with exposure to Stegra tapped Houlihan Lokey Inc. to advise it amid the funding gap, Bloomberg reported in October. Lenders routinely hire advisers when getting ready to negotiate with a company in financial distress.Article contentTrending Oil Tankers U-Turn in Hormuz as US-Iran Talks Break Down PMN Business How the global energy crisis is shaking Canada from coast to coast — and could leave a lasting legacy Oil & Gas Posthaste: More Canadians desperate for tax refund to plug holes in their finances News This TSX oilsands major could jump as much as 20% on the Iran war and Strait of Hormuz crisis, analyst says Investor These forces could push up Canada's home prices later this year: FP Video News Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Oil Tankers U-Turn in Hormuz as US-Iran Talks Break Down PMN Business How the global energy crisis is shaking Canada from coast to coast — and could leave a lasting legacy Oil & Gas Posthaste: More Canadians desperate for tax refund to plug holes in their finances News This TSX oilsands major could jump as much as 20% on the Iran war and Strait of Hormuz crisis, analyst says Investor These forces could push up Canada's home prices later this year: FP Video News