A123 Systems fka AONEQ

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A123 Systems Inc. (AONEQ) hopes to extend a $50 million loan from buyer Wanxiang America Corp. to make sure its access to cash doesn't run out before it closes the $256.6 million sale.
Massachusetts battery maker A123 on Tuesday won bankruptcy court approval to sell itself to Wanxiang, of China , following a competitive auction. The deal has a target closing date of Jan. 15 .
However, the bankruptcy loan that Wanxiang provided A123 is set to mature Dec. 31 , which could leave the company without access to cash until the sale closes. As a result, A123 on Wednesday filed court papers seeking to extend the loan to March 31 .
A123 said Wanxiang has agreed to its request and won't require the company to pay an extension fee.
"The extension of the maturity date to March 31, 2013 , which corresponds with the outside closing date under the terms of the purchase agreement, will allow the debtors to operate in the ordinary course of business and to proceed toward closing which will maximize value for the debtors' creditors," A123 said.
The U.S. Bankruptcy Court in Wilmington, Del. , will consider extending the loan at a Dec. 27 hearing.
A123 , a government-backed battery maker that has yet to turn a profit, filed for bankruptcy in October after striking a deal to sell itself to Johnson Controls Inc. (JCI) for $124 million . But Wanxiang, whose $465 million offer for A123 collapsed this fall after it encountered opposition from lawmakers, outbid the Milwaukee auto-parts manufacturer at an auction over the weekend.
The sale to Wanxiang excludes A123's government business, including all U.S. military contracts, which Navitas Systems of Chicago this week won court approval to buy for $2.25 million .
-- Patrick Fitzgerald contributed to this article.
(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection. Go to http://dbr.dowjones.com)
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