Official: A123 Systems Files for Bankruptcy
October 16, 2012 4:44 PM
comment(s) - last by
The EV battery maker is selling all assets to Johnson Controls for $125 million
It's official: electric vehicle (EV) battery maker A123 Systems has filed for bankruptcy.
Earlier today, it was reported that
A123 Systems was missing loan payments
and may look into bankruptcy protection. That "may" turned into a quick "will," as the lithium-ion battery maker has officially agreed to sell its automotive business assets to Johnson Controls -- a company that optimizes energy efficiencies in car batteries, buildings and electronics.
As part of the agreement, A123 will sell all of the following to Johnson Controls: automotive business assets including automotive products, technology and customer contracts; its cathode powder manufacturing facilities in China; its facilities in Livonia and Romulus, Michigan, and A123's equity interest in Shanghai Advanced Traction Battery Systems Co. The total transaction is worth $125 million.
Johnson Controls, however, will license certain grid, government and commercial businesses back to A123, and will allow A123 to participate in discussions concerning alternatives for these businesses.
"We believe the asset purchase agreement with Johnson Controls, coupled with a Chapter 11 filing, is in the best interests of A123 and its stakeholders at this time," said David Vieau, CEO of A123 Systems. "We determined not to move forward with the previously announced Wanxiang agreement as a result of unanticipated and significant challenges to its completion. Since disclosing the Wanxiang agreement, we have simultaneously been evaluating contingencies, and we are pleased that Johnson Controls recognizes
the inherent value of our automotive technology
and automotive business assets.
"We are also pleased that we have received indications of interest that recognize the value of our grid and commercial businesses. We are encouraged by the significant interest we have received, as multiple parties have submitted proposals for these businesses. As we move through this transaction process, we expect to continue operating and working with customers and suppliers."
A123 Systems and all of its U.S. subsidiaries filed voluntary petitions today for reorganization under Chapter 11. A123 will receive $72.5 million in "debtor in possession" financing from Johnson Controls to help continue operations.
"Our interest in A123 Systems is consistent with our long-term growth strategies and overall commitment to the development of the advanced battery industry," said Alex Molinaroli, president of Johnson Controls. "Requirements for more energy efficient vehicles continue to increase, which is driving automotive manufacturers to pursue new technologies across a broad spectrum of powertrains and associated energy storage solutions. We believe that A123's automotive capabilities are a good complement to our existing portfolio and will further advance Johnson Controls' position as a market leader in this industry."
A123 Systems joins a list of other green companies that fell deep into the red and filed for bankruptcy. Back in September 2011, solar panel company
Solyndra filed for bankruptcy
after receiving a $535 million loan from the U.S. Department of Energy (DOE). In November,
(maker of flywheels for grid efficiency) filed after receiving a $43 million loan guarantee from DOE in 2010.
In January 2012, EV battery maker
Ener1 filed for bankruptcy
after its subsidiary, EnerDel, won a $118.5 million grant from DOE in 2009.
In addition to these woes, A123 Systems itself suffered a huge kick earlier this year when it announced a $55 million battery replacement program for Fisker Automotive's Karma due to the vehicle's issues with the batteries' hose clamps.
Republican presidential candidate Mitt Romney has been known for
blasting the Obama administration's green efforts
, such as EV makers Tesla and Fisker, and this latest bankruptcy may further fuel his fire.
This article is over a month old, voting and posting comments is disabled
10/17/2012 11:09:51 AM
I totally agree that it does not belong here. Amazing how both parties like to wear their Big "O" or "R" proudly before everyone and don't know the facts. The problem and fact is, with "Green" companies that have been funded by this administration, they bled 100's of millions of dollars every year and no one seemed to have a problem with that. Where IS the business plan in that? Do you not have a problem with that? You and I are paying for it while the "Fat Cats" of any Administration are getting paid back for their loyalty to the PARTY! Open you mind to the fact that most politicians DO NOT have our best interests in mind, only their political career and setting up their exit strategy when they leave office. Think Independently!!
"Google fired a shot heard 'round the world, and now a second American company has answered the call to defend the rights of the Chinese people." -- Rep. Christopher H. Smith (R-N.J.)
Battery Maker A123 Systems Misses Loan Payments, May Seek Bankruptcy Protection
October 16, 2012, 9:15 AM
Fisker Cries Foul Over Romney's Attacks on Bush/Obama Green Energy Program
October 4, 2012, 7:13 PM
A123 Systems Outs New Breakthrough in Lithium-Ion Battery Technology
June 13, 2012, 9:31 AM
RIM's New CEO Says All Android Phones are the Same
January 27, 2012, 8:49 AM
Next-generation 28nm GPUs Could Be 45 Percent Faster
November 4, 2011, 10:37 AM
Study Predicts Self-Driving Vehicles Could Rake in Billions
March 6, 2015, 8:34 AM
Dual-Motor Tesla Model S P85D's "Insane Mode" Shocks Passengers
January 28, 2015, 11:18 PM
2016 Cadillac CTS-V Packs 640 hp Punch with 200 mph Reach
January 23, 2015, 3:25 PM
BMW Testing Tech to Allow Users to Auto-Park, Summon Cars Via Smartwatch
December 16, 2014, 9:30 AM
Lamborghini Offers Up $6,000 Leather-Bound Android Smartphone
December 12, 2014, 3:12 PM
Quick Note: GM Teases Next Generation Chevrolet Volt
November 20, 2014, 3:26 PM
Most Popular Articles
Quick Note: Lady Macbath -- One Japanese Woman's Apple Themed Revenge
April 23, 2015, 11:47 AM
Colorado Man Cited for "Killing His Computer" With a Handgun
April 22, 2015, 1:06 PM
Even Hillary Clinton Was Addicted to Nintendo Gameboy
April 21, 2015, 10:30 PM
Newly Discovered Costa Rican Glass Frog is Kermit's Doppelgänger
April 22, 2015, 11:26 AM
HBO to VPN HBO Now Users: Prove You Live in U.S. or We Will Terminate You
April 21, 2015, 12:17 PM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2015 DailyTech LLC. -
Terms, Conditions & Privacy Information