DETROIT, Oct 17 (Reuters) - The Chinese firm whose $465 million bid for bankrupt A123 Systems Inc unraveled this week said on We dnesday its interest in the maker of lithium-ion batteries remains unchanged.
"Wanxiang's goal and interest remains the same," said Pin Ni, head of U.S. operations for Wanxiang Group Corp, referring to its objective in acquiring all of A123. The Hangzhou-based company supplies auto-component and lithium-ion battery technology.
His comment came a day after A123 Systems, which won a $249 million U.S. government grant in 2009 for jump-starting its business, filed for bankruptcy.
A123 agreed to sell its automotive operations, including two factories in Michigan, for $125 million to Milwaukee-based Johnson Controls Inc a top battery supplier and another recipient of federal green subsidies. It has attracted bidders for its non-automotive operations as well.
It was not clear just how Wanxiang could get back into a deal to acquire A123, whose deal with Johnson Controls must be approved by the courts.
"The deal could be countered by other offers that would be more beneficial to AONE's creditors," Jefferies analyst Peter Nesvold said in a research note. "Wanxiang is the most likely other participant in this process, and we are not aware of other suitors at this time."
An individual familiar with the matter noted that what he described as A123's desire to emerge fully from bankruptcy might provide a break for Wanxiang to get back into the deal.
"Chapter 11 is a public process, so anything is still possible," the individual said.
A123's bankruptcy filing came after a $465 million rescue deal with Wanxiang unraveled, which in turn prompted A123 to start the proceedings to sell its automotive operations to Johnson Controls.
A123 came under financial pressure after Fisker Automotive, one of its primary customers, cut battery orders for its Karma plug-in hybrid in October 2011. The supplier's trouble worsened this year when it was forced to recall battery packs made for Fisker, which accounted for 26 percent of A123's 2011 revenue.
The bankruptcy filing comes after roughly eight months of attempts by A123 to find a buyer or strategic investor, Chief Financial Officer David Brystash said in a court filing. In March, A123 hired Lazard Freres & Co, which contacted 74 potential partners and investors.
Twenty-four discussed the process with Lazard, but only Wanxiang offered to invest in A123 as a going concern. In August, A123 announced the $465 million rescue deal with Wanxiang, which immediately gave A123 a $22.5 million loan, including a cash advance of $12.5 million.
Future cash infusions from Wanxiang were contingent on A123 meeting certain requirements, included getting approval from the Committee of Foreign Investment and the Chinese government, as well as the absence of any default.
Shortly before filing for bankruptcy, it became apparent that A123 would fall short of some of those conditions, according to court documents.