Thursday, December 06, 2012

A123 Faces Auction

A123 Systems, a bankrupt lithium ion battery manufacturer that received $133 million in federal stimulus grants, goes on the auction block today.  A123 Systems, founded in 2001 and headquartered in Waltham, Mass, sells lithium ion batteries for electric cars and for utilities that use them as backup, community or renewable-energy storage. On Oct. 16, A123 filed for bankruptcy. 

American Recovery and Reinvestment Act funds were not used to develop intellectual property, but to support the construction of a battery manufacturing facility in Michigan. The Energy Department is working through the bankruptcy process to ensure that any assets sold in bankruptcy that were acquired by A123 using Recovery Act funds are used to facilitate the manufacture of lithium ion batteries at locations in Michigan.

The Energy Department approved a $249.1 million grant for the battery-maker but never delivered the final $115.8 million. Some people familiar with the company say the uproar over a loan guarantee to Solyndra, a solar-panel-maker that went bankrupt in late summer 2011, made the administration wary of putting more money into an ailing firm.

The auction is being held in a Chicago law firm with teams of lawyers and investment bankers in nearby rooms assessing bids and deciding whether to match them. The winner must then seek approval from the bankruptcy judge on Tuesday. The two leading bidders are expected to be Wanxiang America, the U.S. subsidiary of a large Chinese automotive parts group, and Johnson Controls. (Wash Post, 12/5/2012)

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