A Delaware bankruptcy judge approved the sale of all with the assets of failed battery maker A123 Systems Inc. on the U.S. arm of Chinese auto parts conglomerate Wanxiang Group Corp. for almost $257 million.
In asking Judge Kevin Carey to approve the sale, attorneys for A123 noted that the winning bid submitted by Wanxiang America Corp. a week ago was greater than double an initial $125 million offer for the company’s automotive battery unit by Milwaukee-based auto parts marker Johnson Controls Inc.
Even though A123′s defense-related business assets will be sold separately for $2.25 million to Navitas Systems, of Woodridge, Ill., Wanxiang’s purchase still requires approval through the Committee for Foreign Investment in the United States, a federal interagency committee that reviews sales of U.S. companies to foreign owners.
An attorney for A123 told Carey how the initial 30-day review period for CFIUS expires Wednesday, knowning that the panel intends to continue its investigation after a 45-day extension, meaning a choice might not exactly come until mid-January.
Because of the role as the lead bidder, Johnson Controls is permitted being dumped fee and expense reimbursement totaling $5.5 million. But Carey ruled how the breakup fee will likely be place in escrow pending an analysis by A123′s official creditors committee, which suggested that Johnson Controls, after missing out on the bidding, is now lobbying for CFIUS to deny approval with the Wanxiang deal. Lifepo4 Batteries
Carey said he was troubled through the suggestion that whenever doing the auction, JCI could possibly be now working up against the sale to Wanxiang.
Something continues to be raised here today that offers me pause, Carey said, adding that putting the breakup fee in escrow was the prudent course of action.
Josh Feltman, an attorney for JCI, told Carey he previously no personal familiarity with Johnson Controls fitting in with scuttle Wanxiang’s buying A123. But he explained was conscious of some individuals Congress opposed the sale to Wanxiang and would’ve preferred that JCI won the auction. E Bike Battery
Feltman declared that even if JCI were lobbying against the deal, it absolutely was still permitted its breakup fee and should not be penalized for sympathizing which has a lot of Michigan congressional delegates.
Waltham, Mass.-based A123, helping to make lithium ion batteries for electric cars, grid storage and commercial and military applications, sought bankruptcy protection in October, several years after being awarded a $249 million Us department of energy grant.. RC Rechargeable Battery
Attorneys for A123 along with the Department of Justice said Tuesday that they had reached a legal contract resolving a DOJ objection on the sale. The DOJ had argued that A123 needed the government’s consent for the sale due to 2009 grant..
Under the sale, Wanxiang will acquire A123′s automotive, grid and commercial business assets, including all technology, products, customer contracts and U.S. facilities in Michigan, Massachusetts and Missouri. It will also get A123′s cathode powder manufacturing operations in China and its particular equity fascination with Shanghai Advanced Traction Battery Systems Co., A123′s partnership with Shanghai Automotive.