Stegra creditors select consultant amid funding shortage

A group of creditors of Swedish startup Stegra (formerly H2 Green Steel) has turned to global investment bank Houlihan Lokey for advice as the company faces a funding shortfall, Bloomberg reports.

The parties did not comment on this information to the agency.

Stegra is seeking up to €975 million in new financing to cover higher-than-expected project costs and delays in government grants. The company has already turned to PJT Partners bankers for help in raising funds and has made changes to its board of directors.

According to sources, lenders are also working with law firm A&O Shearman, which advised them on the initial financing – a company spokesperson declined to comment.

According to previous statements, senior debt was provided by a number of banks, including Svensk Exportkredit, EIB, BNP, ING, and KfW IPEX-Bank, while junior debt was guaranteed by investment banks and funds led by AIP Management.

The company has not yet fully utilized its credit lines. However, in order to access them, Stegra must complete certain milestones and actions, which, according to sources, is not currently happening. The consultations will focus on unlocking some of these funds, as well as raising new capital.

A number of the startup’s major investors have said they will allocate funds for a new round, but some minority shareholders have announced that they will not participate in the fundraising, at least for now.

As a reminder, Stegra recently appointed a restructuring expert to its board of directors as the company struggles to avert a financial crisis. The startup is already being compared to the bankrupt Northvolt. The company is building the world’s first large-scale green steel plant in Boden, Sweden.

Recently, French hydrogen technology investor Hy24, Stegra founder Harald Mix, Altor Equity Partners, and FAM AB confirmed their participation in a new round of project financing.