A123 says unsecured creditors to get 65 pct of claims
Feb 7 (Reuters) - Unsecured creditors of A123 Systems Inc, a bankrupt maker of batteries for electric cars that had U.S. government backing, will likely collect around 65 cents for each dollar they are owed, according to court documents.
The money largely comes from the sale of most of the company's assets to a unit of China's largest auto parts firm, Wanxiang Group. The acquisition closed last month.
The $260 million sale sparked outrage among some members of Congress, who warned it was a transfer of sensitive technology developed with U.S. taxpayer money. However, the deal had the support of A123's committee of unsecured creditors and was approved by a U.S. government panel that oversees foreign investment.
Wanxiang beat out the only other active bidder, Johnson Controls Inc of Milwaukee, in a court-supervised auction for the assets of A123, which is based in Waltham, Massachusetts.
A123 said in its disclosure statement, which describes its plan for paying off debts, that holders of unsecured claims will receive about 65 percent of what they are owed.
Those unsecured creditors include holders of the company's $143.8 million of outstanding convertible subordinated notes and suppliers. A123 said it had about $17.5 million in trade debt when it filed for bankruptcy on Oct. 16 in the U.S. Bankruptcy Court in Delaware, where the company is incorporated.
Secured creditors will be paid in full while its stock will be canceled and shareholders will receive nothing.
Once the disclosure statement is approved by the bankruptcy court, the plan will be sent to creditors for their approval.
The company had received a $249 million grant from the U.S. government as part of a clean energy program to build manufacturing facilities in Michigan. About half the money was never released.
The company filed for bankruptcy due to weaker-than-expected demand for hybrid vehicles and technical problems. A123 makes lithium-ion batteries for Fisker Automotive, BMW hybrid 3- and 5-Series cars, and General Motors Co's all-electric Chevrolet Spark, which is scheduled for release later this year.
The case is A123 Systems Inc, U.S. Bankruptcy Court, District of Delaware, No. 12-12859