China’s Wanxiang Buys Battery Maker A123 Systems For $260 Million
Call it the worst case scenario come true. After going through a court-managed bankruptcy and auction, defunct EV battery maker A123 Systems has been (mostly) sold to Chinese auto parts maker Wanxiang group. The selling price of $256.6 million was the highest bid, though the sale still has to be approved by the government.
Wanxiang group competed with a joint bid from Johnson Controls and NEC, as well as bids from other groups for control of A123’s battery operations. These batteries are currently used in the Fisker Karma, which has had to stop production pending bankruptcy proceedings. A123’s batteries are also slated to be used in the upcoming Chevy Spark EV as well.
Pending approval by the Delaware bankruptcy court and the Committee for Foreign Investment in the United States, Wanxiang will take over A123, which received a $249 million low-interest loan from the U.S. government. A123 can apparently still draw down on $120 million of that loan, though its stocks will hold no value as the sale price is less than its debt.
Wanxiang and A123 had discussed a $465 million deal that would have saved the battery maker but given Wanxiang controlling interest. The bankruptcy filing killed that deal, and now Wanxiang will end up with almost all of A123’s technology and contracts.
Almost, because one thing Wanxiang could not bid on was A123 System’s U.S. military and government contracts. Those will likely go to Navitas Systems, based in Woodridge, Illinois. Wanxiang already does a billion dollars in auto parts business in the U.S. every year, though what happens to A123 going forward remains to be seen.
Not a good day for EV advocates, though maybe the Chinese can turn A123 around for the better?
Source: Green Car Reports