Wanxiang Wins Bidding for A123 Assets
On Sunday, electric-car battery maker A123 Systems announced the results of the auction of its assets held by the U.S. Bankruptcy Court for the District of Delaware. Out of four bidders for the assets -- Johnson Controls and NEC bidding together, Siemens , and Wanxiang Group, the Chinese auto-parts manufacturer has emerged victorious.
Assuming the court ratifies the results of the auction on Tuesday, and U.S. regulators don't object, A123 will now sell "substantially all" of its assets to Wanxiang's U.S. subsidiary, Wanxiang America, for $256.6 million. The one element of A123 that wouldn't go to Wanxiang is its government business dealing with the U.S. military. That will be purchased by Navitas Systems, an Illinois-based provider of "energy-enabled system solutions and energy storage products for commercial, industrial and government agency customers," for $2.25 million.
The total monies raised by the assets sales will be slightly more than the $250 million in renewable-energy grants A123 has received from the Department of Energy. They will not, however, be sufficient to cover all of A123's indebtedness to its creditors. As a result, shareholders of A123 Systems will be completely wiped out, and its common stock will be worthless.
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