U.S. Government Says A123 Systems Cannot Be Sold Without Consent
A123 Systems is the bankrupt lithium-ion manufacturing company that received a $249 million grant from the Energy Department. Now the U.S. government is saying that A123 cannot be sold without their consent. Two of A123′s bidders are Johnson Controls and Wanxiang Group Corp. If a Chinese-based rival Wanxiang owned a U.S. government backed company, then it would be pretty awkward given that offshoring was a hot ticket issue in this past election.
A123 can still receive $120 million under various government grants according to court records. The government also said that the terms of the sale must include the right to demand compensation for the sale of assets like equipment or property that was financed using the clean energy grant.
Principal deputy assistant Stuart Delery has not indicated whether he supports or opposes a specific buyer of A123. Other parties that have an interest in A123 includes NEC Corporation in Japan and Siemens AG in Germany.
A123 Systems had filed for Chapter 11 bankruptcy protection in October. They are currently in negotiations to sell their battery business to Johnson Controls for $125 million. A123′s sale is subject to bids at an auction next month. Wanxiang plans to make a bid. The money earned from the auction will go towards paying creditors.
[AutoNews]This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at +AmitChowdhry