China's Wanxiang wins A123 auction
Updated: 2012-12-10 09:57
By Bloomberg News in Wilmington (China Daily)
China's Wanxiang Group bid $260 million for assets of car-battery maker A123 Systems Inc, winning a bankruptcy auction, officials said.
The assets purchased may include A123's automotive segment, energy-grid storage business, commercial business and the United States government business.
"I can tell you that we have won the bid, and the total value is about $260 million," said Mo Xiaoping, a spokesman for Wanxiang Group based in Hangzhou, Zhejiang province. "From our side, we see no additional obstacles to complete the deal."
A123, which received a $249.1 million federal grant, held the auction behind closed doors in the Chicago law offices of Latham & Watkins. The auction began on Dec 6 with prospective bidders including Johnson Controls, Wanxiang, Siemens AG of Germany and Tokyo-based NEC Corp.
The company will seek court approval to sell the assets from US Bankruptcy judge Kevin Carey at a Dec 11 hearing in Wilmington, Delaware.
A123's automotive business includes facilities in Livonia and Romulus, Michigan. A123 used $132 million of the grant toward building the two Michigan factories.
As part of the purchase, the buyer may get A123's stake in a joint venture with Shanghai Automotive Industry Corp.
The grid business focuses on energy generation, transmission and distribution while the commercial division develops products for industries such as telecommunications, industrial robotics and power tools, according to court papers. A123 works with the government on portable power solutions, unmanned aerial vehicles, pulsed power weapons as well as small energy cells for remote devices.
A123 announced in August that it was working on a deal with Wanxiang, China's largest auto-parts maker, for financing in exchange for a majority ownership stake. The battery-maker needed a lifeline after recalling faulty batteries supplied to its main customer, Fisker Automotive Inc.
Fisker Chief Executive Officer Tony Posawatz said last month the Anaheim, California-based automaker was awaiting the sale of A123's Michigan plant that makes lithium-ion batteries for its Karma so it could resume production of the $103,000 plug-in sedan.
Wanxiang had planned to invest as much as $465 million in A123, giving the Hangzhou, China-based company a stake of as much as 80 percent, A123 said in an Aug 16 statement.
Wanxiang has been pursuing approval from the Committee on Foreign Investment in the US CFIUS, a multiagency group led by the Treasury Department that reviews mergers and acquisitions for national-security concerns when a takeover may give a foreign owner control of a US company.
A123, based in Waltham, Massachusetts, filed for bankruptcy in October after the Wanxiang deal was scuttled amid congressional Republicans' reluctance to allow the sale of the government-funded company to a Chinese company.
A123 listed assets of $459.8 million and debt of $376 million as of Aug 31 in court documents.