Read this and you know why shareholders should unite.
It was no secret that A123 Systems was desperate for money. It’s also no secret that Chinese companies are interested in buying Western companies, especially when they can acquire useful technology in the deal. So the announcement in august that Wanxiang had signed a non-binding memorandum of understanding to invest up to $450 million in A123 through a combination of bridge loans, convertible notes, and warrants seemed like good news for both companies.
Reading the details of the release, $75 million of the investment was to be a short term bridge loan, which does not involve the purchase of A123 stock. The rest was to consist of $200 million in convertible notes (which can become stock) and $175 million which might be invested with the exercise of warrants. An exercise of all these warrants and the full conversion of the convertible notes would result in Wanxaing controlling 80% of the company, or about 680 million shares, based on the 170 million shares A123 had outstanding at the end of July. Doing the math, and assuming that the initial $75 million bridge loan was not used to purchase shares, that’s 55 cents a share.
Some interesting questions:
What happened between Wanxiang's offer in august and AONE's Chapter 11 filing in October?
Why did AONE file Chapter 11 when they got a great offer to survive?
Why is no one talking about this affair in the media and online?
Why don't we hear and see AONE's management doing their best to create as much as value for its shareholders?
Do you think it's legal and logic that the Committee on Foreign Investment in the United States will approve this worst case scenario knowing that Wanxiang did a much better offer 3 months ago?
AI
