Fight in Store over Bankrupt Battery Maker - Finance News ...

Bankrupt U.S. battery maker A123 Systems Inc. (NASDAQ: AONE) today got permission from the U.S. Bankruptcy Court to use $15.5 million of ?debtor-in-possession? financing from a total of $72.5 million in financing from Johnson Controls Inc. (NYSE: JCI). Johnson has offered to pay $125 million for A123?s automotive business.

That ?stalking horse? bid looks appears to be in the sights of Chinese auto parts maker Wanxiang Group, which said that the company intends to bid at auction for A123. Wanxiang also will contest Johnson?s position as the stalking horse bidder for A123. According to a report from Reuters, Wanxiang appeared in bankruptcy court with its own proposal for debtor-in-possession financing, but the judge ruled that Johnson?s loan was acceptable on an interim basis. The court will rule on the stalking horse bids on October 30th.

The Chinese firm had tried to put together a $465 million deal that would have saved A123 from bankruptcy, but was unable to do so because the battery maker could not meet some relatively low lending hurdles.

A123 has received a $249 million grant from the federal government, of which about half remains unspent. The fate of the unspent funds remains unclear, no matter which firm wins an auction for A123. If Wanxiang wins, the sale will be subject to review by the Committee for Foreign Investment in the U.S. (CFIUS).

Shares of A123 are up 64% today at $0.123, in a 52-week range of $0.05 to $3.91. More than 46 million shares have changed hands so far today.

Paul Ausick

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Source: http://g7finance.com/personal-finance/fight-in-store-over-bankrupt-battery-maker/

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