A123 to seek approval for loan from Chinese auto parts maker
(Reuters) - Bankrupt battery maker A123 Systems Inc plans to ask for court approval for a loan from auto parts maker Wanxiang Group Corp, which could give the Chinese company an advantage over a U.S. rival in a takeover battle for A123.
A123, which filed for bankruptcy earlier this month, has an interim bankruptcy loan with Johnson Controls. But the company revealed in a court filing on Friday that it reached agreement for a replacement loan from Wanxiang.
A debtor-in-possession or DIP loan often gives the lender significant leverage over the bankrupt company, allowing the lender to demand asset sales and set timelines for conducting the bankruptcy.
The disclosure was contained in an agenda for a hearing scheduled for Tuesday in the Delaware Bankruptcy Court in Wilmington.
"The debtors intend to file an emergency motion in advance of the hearing seeking approval of a replacement DIP facility with Wanxiang America Corp," said a status update in the agenda for Tuesday.
Michael Freitag, a spokesman for A123, and Bojan Guzina, a lawyer for Wanxiang, declined to comment.
Rebecca Fitzgerald, a spokeswoman for Johnson Controls, did not immediately respond to a message seeking a comment.
A123, a maker of lithium-ion batteries used in hybrid and electric vehicles, had received a $249 million U.S. government grant in 2009 designed to boost the renewable energy industry.
However, the company declared bankruptcy amid a disappointing market for electric vehicles and after it had to recall battery packs made for Fisker Automotive, which made up 26 percent of A123's revenue in 2011.
Fisker on Friday objected to A123's plans to selling the company at an auction with an initial "stalking horse" bid from Johnson Controls, or JCI, for $125 million.
"The best interests of the estates, however, are not well served through a hasty and unfair sale process designed to ensure that JCI is the ultimate purchaser," Fisker said in its court filing.
It asked the court to extend bidding deadlines for 30 days.
Wanxiang would need approval from the Committee on Foreign Investment in the United States and the government of China to acquire A123.
Wanxiang's lawyer told the court earlier this month the Chinese company intended to present its own stalking horse proposal to the court next Tuesday, but that matter was postponed to November 5, according to the agenda.
Wanxiang has been pursuing A123 for months. The bankruptcy came after a $465 million rescue deal by the Chinese company unraveled after the U.S. battery maker was unable to meet some conditions of the agreement.
The case is A123 Systems Inc, Delaware Bankruptcy Court, No. 12-12859.
(Reporting By Tom Hals in Wilmington, Delaware; Editing by Tim Dobbyn)
- 'Good night': Haunting final contact from missing Malaysian jet |
- Crimeans vote over 90 percent to quit Ukraine for Russia |
- Ukraine, Russia agree Crimea truce until March 21-Ukraine minister
- North Korea fires 25 short-range and obsolete rockets: South Korea
- Defense at bin Laden son-in-law trial cites alleged 9/11 mastermind