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29-10-2012 18:06 DJ Wanxiang Replaces Bankruptcy Lender as A123 Bidding War Heats Up
By Patrick Fitzgerald
A123 Systems Inc. (AONE), the electric car battery maker that recently filed for bankruptcy, is seeking emergency approval to tap a $50 million loan provided by a Chinese auto parts maker to fund its Chapter 11 case pending an auction of the clean energy firm.
Lawyers for A123 Systems said Sunday in a bankruptcy court filing that Chinese auto parts maker Wanxiang Group Corp. will provide the so-called debtor-in-possession financing, replacing initial lender Johnson Controls Inc. (JCI) Wanxiang's bankruptcy loan, which cuts the interest rate to 12% from 15% from Johnson Controls' initial offer, comes as a bidding war heats up between the two companies vying for the Massachusetts-based battery maker's assets.
Wanxiang is still eager to buy A123, which filed for Chapter 11 after receiving nearly $250 million in government grants, despite having been left at the altar earlier this year when a previous deal collapsed.
As late as a month ago the Chinese auto parts maker thought it had a deal to buy an 80% stake in A123 Systems for $465 million. Wanxiang's initial offer--which also would have included the purchase of A123's consumer arm and grid-energy storage division--sputtered after it encountered opposition from lawmakers concerned about the transfer of U.S. taxpayer dollars and technology to China.
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