A123 Systems fka AONEQ

[DADDY FAT SAXX]

A123 HAS MORE VALUE THAN WE THINK

Bankrupt Massachusetts cleantech upstart A123 Systems still holds plenty of value for the big companies wrangling to cash in on electric cars and a more efficient energy grid.

American automotive systems giant Johnson Controls (NYSE: JCI) and Chinese manufacturer Wanxiang Group both want to get their hands on A123's car-battery manufacturing facilities, some of the few places where batteries that power electric cars and hybrids are made.

Jay Fitzgerald writes today in the Boston Business Journal (premium content):

In announcing its bankruptcy move, A123 said it had entered an asset-purchase agreement with Johnson Controls to acquire the firm’s automotive business, including its car-battery technology, products, customer contracts and its manufacturing plants in Michigan and China, for $125 million, with an additional $72.5 million loan from Johnson thrown in to keep the firm operating until a sale can take place.

The Wanxiang Group, which this past summer tentatively agreed to invest up to $465 million to buy a controlling interest in A123, made clear late last week during a Delaware court hearing that it’s still interested in acquiring the firm and its assets.

But, Fitzgerald continues, A123 has other valuable assets that may be lost in the hard look the car-battery business is getting. The company also makes batteries to store power for electrical grids. That's an essential technology to develop as such clean electrical supplies as wind and large-scale solar power are adopted because stored electricity could be substituted to the grid when the wind isn't blowing or the sun isn't shining.

Fitzgerald writes:

Over the past few years, the grid business had emerged as a major revenue driver for the A123, as its auto-battery unit struggled and ultimately failed to take off.

Founded in 2001, A123 makes lithium-ion batteries, a technology seen as key to clean energy. Despite $129 million in federal funding, though, the company hasn't been able to become a profitable, going concern. On October 16, it filed for bankruptcy protection, and its case is under review in bankruptcy court.

Prior to its bankruptcy, A123 was touted as a "success story" by President Barack Obama. The president praised A123 in 2010, prior to the company's announcement that a battery it had made had been defective. The defective battery announcement marked the start of A123's decline as a company. At its high after a 2009 IPO, A123 was worth $2.3 billion. The morning after its bankruptcy filing, the company was worth $11 million.

But the president may still be right. A123's technology could still have a big impact on what we drive and how our electricity is generated.


http://upstart.bizjournals.com/companies/innovation/2012/10/26/a-123-systems-still-valuable.html?page=all