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Don Mattingly was a pretty good hitter...
I see you liked my comment, but why not copy and paste the whole thing?
I see you liked my comment, but why not copy and paste the whole thing?
Equity holders are the last in line but they are still in line, and as of yet, nobody has come out and said that there is no substantial likelihood of equity receiving a distribution.
While I agree that the revelation was troubling, the bright side is that there will be no shareholder's committee lawyers skimming off the top. It's not unusual for lawyers in these cases to take 20-30% of the recovery from equity holders.
Well one thing I found encouraging about the "Quash Deposition" is this excerpt from page 4 which reads:
"While the United States does mention “supervisory control” in its Limited Objection, it does so only in reference to the terms of the Assistance Agreements and to emphasize the weighty federal interest in the Funded Property. The reference to supervisory control does not create a fact issue sufficient to support a deposition. Indeed, as the Committee is well aware, the United States is not contending that its “supervisory control” makes it, and not the Debtors, the owner of the Funded Property, as the Third Circuit held in an analogous matter in Westmoreland. Rather, as reflected in the Bidding Procedures Order and restated in the United States’ statement filed on November 30, 2012 [D.I. 495], the United States supports the sale of the Funded Property conditioned on the preservation of its rights, including those under the Title Provision, throughout the transaction and, ultimately, against the purchaser of the Funded Property."
Correct me if I'm wrong but this seems to be a positive for shareholders in that the U.S. is not attempting to seek monetary claims against A123 from auction proceeds, for grant money which they have already paid down. But rather are simply exercising their rights to consent to a deal (in the event that a foreign bidder wins)?
http://www.loganandco.com/dockets/ASI/ASI_DKT_000583_085274_00129459_d8a9c590ec5f7b3440341e819cf7a4.pdf
too late- already googled it, but thanks for being a condescending schmuck
Forgive my ignorance but who or what is the Fab 4?
Thanks. One thing which I found very positive about the article is: "The U.S. government has also warned it must give its consent before its $249 million grant to A123 can be transferred to a new owner." In other words the article is saying that the Government will not attempt to go after DOE grant funds that A123 has already collected, in the event that Wanxiang wins bid. As a side note, the remaining portion of grant money due A123 is $132 million and this is not built into assets in the same way the $100 million in Michigan tax credits are. Think of it as a bonus to the winning bidder.
Well I'm not well-versed enough in risk analysis to be able put forth any serious odds, perhaps you should go ask Nate Silver what he thinks. But I don't think you should just be throwing around numbers unless you have some sort of statistical justification. Honestly though if I had to say, my gut tells me its 50-50 that we get a bid of $500 million or more. Anyway if you believe the post by dannyypk- a native Chinese speaker on this board, there was a recent Chinese newspaper article reporting that Wanxiang's confidential bid was for exactly the same amount as their initial buyout offer: $465 million. Now you can choose to believe that or not but I personally think it's a reasonable bid given how bad they want this. That, and they don't want to lose face by low balling in the current political climate.
If you really think those are the odds you should have your head examined for being in this spec play, and just sell first thing in the morning.
The point you are missing is that the Government is waiving its right to consent to a Wanxiang deal by "receiving compensation for their attributable percentage of current fair market value of the Funded Property". In other words if Wanxiang's bid is high enough they can't block the deal.
You bring up an important point and one that I've mentioned before but nobody on the board addressed. The way I read it is that the Government waives its right to consent to a Wanxiang deal by receiving compensation for their "attributable percentage of current fair market value of the Funded Property". What this percentage is remains unclear i.e. will Government seek the full amount of $117 million that A123 already collected, or will it be some other percentage which Judge Carey deems reasonable? Although the grant was never touted as a loan guarantee which needed to be paid back, I think you're right that the government is calling an audible here and sees an "out", and a way to recoup losses while also reaping the benefits of taxpayer investment. The grant itself was only used to "fund operations" at the Livonia and Romulus plants and was not used in the development of A123's intellectual property; basically it was money used to pay employees in order to step-up production and drive the price of the electric battery down, and it worked: before the stimulus the cost of an EV battery was $33,000 compared to $17,000 today! Forget for a moment that Wanxiang has pledged that they will keep all operations in the US and "won't gut" A123. This is still the cost that a Chinese company pays to get into this market after the product's cost has been reduced twofold. Is it fair? Define fair. China arguably needs this technology more than any other country on Earth, so perhaps it is an equitable arrangement that they pay more for it. The way I see it though, its not such a bad thing. Their desire to get this technology is well-documented and knowing that they will have to pay more for it could well drive up bids from other interested parties. To answer your question about PPS, the formula is simply: PPS = (Bid - Debt) / # of common shares. Substitute whatever numbers you like given the scenarios you think could play out..
Just need to disable javascript but here is the article:
Wanxiang makes its case for battery-maker A123
With both U.S. and foreign bidders, politics may come into play in Thursday's auction of bankrupt energy-storage technology firm
By Julie Wernau, Chicago Tribune reporter
December 2, 2012
Thursday's auction of battery-maker A123 is expected to draw both U.S. and foreign bidders against the backdrop of growing pressure from military leaders and politicians to block U.S.-funded technology from being transferred outside the country, especially to a Chinese-affiliated company.
The struggle over government-backed A123 comes as the U.S. has stepped up efforts for supremacy in energy storage technology. On Friday, Energy Secretary Steven Chu came to Chicago to announce that the Department of Energy would accelerate battery development through Argonne National Laboratory, in suburban Lemont. Funded with $120 million, the goal is to make batteries that are five times as powerful and five times less expensive in five years.
"You have to be in this game," Chu told the Tribune. "If you say, 'No. There's a chance we're going to fail, therefore we'll let Japan, Korea, Germany, China, you name it, own this space,' then we will have failed."
Two of the major players keen on acquiring A123's assets are Johnson Controls Inc., of Milwaukee, and Wanxiang Group Corp., a Chinese auto parts maker whose North American headquarters is in Elgin.
Johnson Controls, which was awarded $299 million in federal grants, has said A123's technology is in its early stages and will require further funding but that the company is committed to adding jobs in the U.S. It describes itself as "one of the last standing American companies competing in and building this U.S. advanced battery industry."
Meanwhile, a coalition of former U.S. military leaders and industry experts urged the Committee on Foreign Investment in the U.S. to thwart Wanxiang's bid in a Nov. 27 letter: "Aside from the national security risk, American taxpayers should not pay for development of a technology that is freely transferred to a non-allied nation.''
But some, like Charles Gassenheimer, believe that has already happened.
Last week, Gassenheimer was in Washington lobbying for Wanxiang. In the past he has also been the chairman of electric car maker Think and chief executive of battery-maker Ener1, both of which were snapped up out of another bankruptcy by Boris Zingarevich, a Russian businessman. Both Ener1 and Think had also been nurtured by the DOE and state and local government funding. Ener1's biggest investor other than Zingarevich is Wanxiang, which has a joint venture with the battery-maker to co-manufacture lithium-ion energy storage systems for the Chinese market.
"Why is (the Ener1-Think case) different than this case where Wanxiang has been in the U.S. since 1994, reputably, and has made tons of acquisitions in the U.S. and isn't state-owned by the Chinese government?" Gassenheimer said.
He also noted that with his acquisition of Ener1, Zingarevich also acquired U.S. military contracts. Wanxiang has promised to strip out any military contracts if it wins the A123 auction.
At one point, Wanxiang believed it had an agreement with A123. Wanxiang had offered to invest $450 million in A123, which would have spared it from bankruptcy. But A123 didn't consummate the deal. Apparently there was concern the bid would fail to garner government approvals.
For Wanxiang Group Corp., a $13 billion company and the largest automotive components maker in China, A123 would fit into its investment portfolio of electric-vehicle-related companies. The strategy would be to hold on to these assets as electric vehicles caught on and batteries are improved.
But the proposed deal in August set off a political firestorm. U.S. Sens. John Thune, R-S.D., and Charles Grassley, R-Iowa, pressed the Energy Department to explain how it could allow U.S. battery technology to possibly be snatched by China. (A123 was awarded a $250 million grant in 2009 and had drawn down about $132 million as of its bankruptcy.)
Shortly before the presidential election, A123 filed for bankruptcy protection. In its filings, A123 said it had contacted 74 potential suitors, but only Wanxiang offered to invest in A123 as a whole prior to its bankruptcy. Other offers were limited to acquiring portions of the business. At the same time, A123 announced a prepackaged deal in which Johnson Controls would acquire A123's automotive portfolio for $125 million. That amount is where the bidding begins.
This week's auction will be held at the Chicago office of Latham & Watkins, which represents A123. As the so-called stalking horse bidder, Johnson Controls is entitled to a $2.5 million breakup fee if it isn't chosen as the winner.
For his part, Pin Ni, president of the American arm of Wanxiang, is resigned to the fact that politics may ultimately decide the fate of A123.
"We thought that we had a deal, but apparently for whatever reason they engaged in discussions with Johnson Controls," Ni said in an interview last week. "This is a business. They have the right to choose whoever they need to choose. If they think that Johnson Controls will be a better fit for them, that's fine."
If Wanxiang acquires A123, its business relationship with Zingarevich means it would have access to two battery companies and three auto companies catering to three kinds of distinct electric vehicle customers and with doors to China and Russia.
"It's more important for us to save this business," said Ni, who said he would keep open A123's plants, retain its workers and continue to produce batteries even if it meant losing money for five or 10 years.
As for concerns about A123's technology falling to foreign competitors, Ni brushes off the notion, repeating that his Elgin-based company has invested in America for two decades.
"If you're an immigrant here," he said, "you love this country. You make this commitment here. You are a part of this economy."
jwernau@tribune.com
Twitter @littlewern
Copyright © 2012 Chicago Tribune Company, LLC
Hey bro is there gonna be a bump??? Need to get outta this- need money for Christmas presents, LoL!! Hey is this UBSS dude gonna stop reaming us longs anytime soon? Please advise.
P.S. For all stoner and munchie-man, anyone tried the new McChicken Deluxe yeat? Please advise ASAP! I am curious about this sandwich...
Wow huge! Finally a law addressing the FEDS
Probably just a lot of peeps not wanting to hold through weekend. Happens a lot with pink otc
They've haven't been excluded from bidding because there is still something called judicial oversight. In the last court session any objections made by U.S. Government lawyers (and you can bet they were present) as per terms of bidding were resolved by Judge Carey. Then a few days later the news bulletins come out that a Wanxiang deal would need government approval. Well guess what? This is nothing new. Whether the republican senators like it or not, it is still Carey's courtroom. We can't just sit around forever waiting for a decision from bureaucrats while A123 keeps bleeding away money. It is in the best interest for all parties that this resolves as quickly as possible and that the company gets the most money they can for their assets from qualified bidders, regardless of politics.
You registered on this site just to say that? Boy you must really care about us shareholders?
At the end of the day its Geithner's call. Now, some food for thought regarding Geithner (from his wiki page)
"Geithner spent most of his childhood in other countries, including present-day Zimbabwe, Zambia, India, and Thailand where he completed high school at the International School Bangkok. He attended Dartmouth College, in the tradition of his father and paternal grandfather, graduating with an A.B. in government and Asian studies in 1983. He studied Mandarin at Peking University in 1981 and at Beijing Normal University in 1982. and earned an M.A. in international economics and East Asian studies from Johns Hopkins University's School of Advanced International Studies in 1985. He has studied Mandarin and Japanese."
"Shortly after assuming his role as Secretary of the Treasury, Geithner met in Washington with Chinese Foreign Minister Yang Jiechi. He told Yang that the U.S. attached great importance to its relations with China and that U.S.–China cooperation was essential in order for the world economy to fully recover."
"Geithner co-chaired the high-profile U.S.–China Strategic and Economic Dialogue from July 27 to 28 in Washington, D.C. and led the Economic Track for the U.S. side."
Yeah but look at the way MJNA usually bounces up after it hits the 50 day MA (Look at post HotStockAce).
Okay we bounced off 50 day MA today, can we expect a run for while, or should we look for more manipulation from UBSS and other makers to further drive price down?
This is very convoluted. One source maintains deal must be approved by Strategic Materials Advisory Council, one source just says Government and now DOJ? Well which one is it for Christ sakes? All of them? Looks like those two republican senators got a little butthurt about the lack of response to their op-ed letter and decided to pull some strings in Washington. In any case its begs the question about which branch of Government takes precedent. I would think Executive and since Geithner is Obama's point man I would hesitate to think Obama would overturn a CFIUS verdict.
Yeah pretty disappointing bid from a company which generates $36 billion in annual revenue. Hopefully its just their starting bid as the article does say "more than ¥ 10 billion in the end".
10 billion yen, that's 122 million dollars for grid tech.
I for one will make big donation to her paypal if this resolves favorably for shareholders. And by favorably I simply mean not getting wiped out.
I'll will thank you when it happens, I need this back to .125 to break even. Need the money for Christmas presents. LoL.
Why do you kiss this guy's ass so much? He's obviously a paid short and a month later has still never mentioned anything about the bidding war.
They are employing 10 lawyers with two separate legal firms. I'm unclear as to whether they are on A123's payroll. This could turn out to be pretty costly, but obviously its a very complicated case.
D. J. Baker
Latham & Watkins LLP
Christopher R. Harris
Latham & Watkins LLP
Adam S. Ravin
Latham & Watkins LLP
Annemarie V. Reilly
Latham & Watkins LLP
Matthew L. Warren
Latham & Watkins LLP
Drew G. Sloan
Richards Layton & Finger, P.A.
Mark D. Collins
Richards, Layton & Finger, P.A.
Michael Joseph Merchant
Richards Layton & Finger, P.A.
Amanda R. Steele
Richards, Layton and Finger P.A.
Marisa A. Terranova
Richards Layton & Finger, P.A.
I hope so. I doesn't hurt bids. But revised debt numbers have not been published since Aug. 31. You can bet that the full liabilities/debt will be reassessed before Judge Carey determines what commons are eligible to receive. He's not just gonna forget about cash burn/DIP/KEIP when it comes time to sell this company. Anyway I still wouldn't worry about it too much- even INITIAL Wanxiang bid still leaves shareholders in tact, lots to look forward to here IMO.
Net Operating Losses can be written off next year if I understand correctly. The bid war starts this year.
I believe there is value here. Just be realistic about debt.
By the time auction rolls around debt will be about $461 million + litigation/court fees.
Well in the case of Siemens they never officially stated what they want to bid on. A mega industrial conglomerate like Siemens could easily snag up A123 in a heartbeat. This is a company which generates $100 billion in annual revenue and their acquiring the auto division could make sense given EU gas prices over $10/gallon. Not saying its their sector, but why the hell not? NEC however is on record for only wanting grid tech. And yes JCI only wants auto. Fisker may be cash strapped, but considering how much they rely on A123, and how well-connected they are to venture backers they could get maybe the private financing needed to get a deal done... BAE, a huge aerospace and defense company which generates $25 billion in annual revenue could be one of the big boys in the bid war. Also Airgas is owned by BAE and admittedly, not sure where their interests lie here. I also agree that Maxwell probably doesn't have the clout to get anything done. Honestly the others I haven't really researched. Keep in mind however that there are a number confidentiality agreements in place, companies who won't show their hand until its time, and maybe some other interested parties who are not concerned with court proceedings.
Not sure about keeping track of the bond prices, but I believe their position as unsecured creditors has already been built into the BK liabilities. Somebody correct me if I'm wrong.
Yeah I doubt there'll be much viable bidding news before the auction unless leaked, but I wouldn't hold my breath for that. The only real news I could see in the pipeline would be for the CFIUS ruling on Wanxiang but unfortunately we may not even have that news before Dec. 6th.
Regarding peeps who watch the daily PPS and charts, I think many are just hoping to recoup their losses and get out prior to auction- a sensible approach to limit downside risk. Then again some are just looking to daytrade because of the solid .09 support and the prospect that it only trades higher from here. Personally though I'd rather be safe and not have to chase it, in case it blows up.
Of course you're right to be skeptical- should you be leery of investing in this company? Yes of course. But it is a spec play with huge promise. Weigh the pros and cons. And of COURSE there are cons to go along with the pros. If you bet the ranch on any spec/penny stock you are most certainly a fool. But I for one, like the odds here. Good luck.
Not exactly. The bid deadline is for Dec. 4th at 5:00 p.m. Eastern. That is when confidential bids are due. The confidential bids are just to set the the bar and in effect, determine what the starting bids will be for the Dec. 6th auction.