AMF Pension has invested close to two billion kroner in Stegra.
The Second and Fourth AP funds have contributed money to Al Gore’s climate fund Just Climate, which invested billions in the crisis-ridden steel company – and will continue to do so.
But a bankruptcy would not be noticeable to Swedish pension savers, says economist Claes Hemberg.
– You put crumbs in the context. The pension savers will not experience any difference.
Stegra, which wants to produce fossil-free steel at a factory in Boden, is bleeding money.
The factory construction has taken longer and has become more expensive than the company’s management had anticipated.
Shareholders and lenders are worried, according to the business newspaper Financial Times, which also reported that the company’s board discussed the risk of insolvency – i.e. inability to pay its debts on time.
Recently, Stegra announced that it will take in another ten billion kroner in a new financing round.
The investment company Vargas, which is controlled by venture capitalist Harald Mix, has announced that it will not contribute more money. As a result, Al Gore’s climate fund Just Climate, which will participate in the financing round, looks set to become the steel company’s new largest owner, writes Affärsvärlden.
The steel factory in Boden is not finished and now the money is running out.
Photo: PÄR BÄCKSTRÖM
The AP funds have invested
Swedish pension money can thus be used to save Stegra, since both the Second and Fourth AP funds invested in Just Climate.
Affärsvärlden writes that the Fourth AP Fund invested SEK 419 million and that the Second AP Fund invested at least SEK 193 million. In addition, the Second AP Fund, together with other actors, has invested SEK 742 million directly in Stegra.
– Yes, that’s right, our investment in Stegra is in the co-investment fund JC Verde, which has been started by Generation Investment Management (parent company of Just Climate, editor’s note). The fund is registered in England, says Andra AP-fonden’s communications manager Caroline Eking to the newspaper.
That is what the crisis in Stegra is about
• The steel industry is one of the world’s dirtiest. Step up was founded in 2020 by the investment company Vargasthen under the name H2 Green Steel, with the aim of producing fossil-free steel. Vargas was founded by Harald Mix and Carl-Erik Lagercrantz.
• Other major owners in Stegra include the venture capital company Altaralso founded by Harald Mix, Al Gore’s climate fund Just Climate and Stenbeck-controlled Kinnevik. Pension company AMF has also invested the steel company. The largest part of Stegra’s financing, around SEK 50 billion, consists of loans.
• Stegra is building a large steel factory in The shop. The construction has been delayed and has become significantly more expensive than expected. Now it seems the money is about to run out. Stegra recently announced that it will take in ten billion in a new financing round. The Financial Times business newspaper has reported that Stegra’s board discussed the risk of insolvency – that is, the inability to pay debts on time.
• There are several common denominators between Stegra and Northvolt. They have the same co-founder, Harald Mix via Vargas, as well as a couple of other joint owners. Both Northvolt and Stegra have been largely financed with borrowed money. In addition, Stegra, like Northvolt, has counted on future income from, among other things, the automotive industry. Northvolt stopped paying its suppliers. Stegra has not yet done that. The Northvolt bankruptcy hit Skellefteå hard. If Stegra follows the same path, Boden, which has invested over 600 million in various projects linked to the steel company, would be hit hard.
The economist: Small amounts
The AP funds lost around six billion kroner when Northvolt went bankrupt and AMF Pension lost about two billion kroner. AMF Pension has invested just over SEK 1.9 billion in Stegra. It has not yet been decided whether it wants to push for more money.
– We are involved in discussions that are held in connection with the ongoing capital raising round, but currently do not have any information about possible participation, says AMF Pension’s press manager Jens Söderblom to Aftonbladet.
If Stegra goes bankrupt, further pension billions would be lost. However, it would not be noticeable for Swedish pension savers, says Claes Hemberg, energy economist at Nibe industries.
– Exciting, innovative or risky projects like this are projects that can go down the drain. AMF, Alecta or the AP funds know this when they deposit money. Therefore, they put in small amounts, because they are small amounts in the grand scheme of things. You put crumbs in the context. The pension savers will not experience any difference, he says.
“We’ll have to see if they get production started,” says economist Claes Hemberg about Stegra.
Photo: OLLE SPORRONG
“We’ll see”
Green industrial projects are not without challenges. Claes Hemberg sees certain similarities between Stegra and Northvolt.
– Northvolt said: “We’re going to make batteries that no one has made before. They’re going to be lighter and more efficient – and more expensive – than ever before.” It’s like flying to a planet far away, so very difficult. They never got production going.
Producing “green steel”, as Stegra wants, may not be as difficult, but it is also not simply simple.
– Stegra has not come as far as Northvolt did before they went bankrupt. They have difficulty with production and supply chains. You want to do something that no one else has done before. So the comparison with Northvolt might not be so silly. We’ll see if they get production started.
