Nanophosphate Lithium Developer Files for Voluntary Chapter 11
A123 Systems, the Massachusetts developer and manufacturer of Nanophosphate brand lithium iron phosphate batteries, said Tuesday that it is selling its automotive assets and technology to Johnson Controls, Inc. via a $125 million transaction that includes $72.5 million in debtor-in-possession financing by JCI for A123 to continue operations.
A123 said that “to facilitate the transaction process,” A123 and its U.S. subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. bankruptcy code, in the U.S. Bankruptcy Court for the District of Delaware.
The JCI deal means that acquisition talks between A123 and China’s Wanxiang are off.
JCI to Get China Action Too
Instead, JCI will acquire A123’s automotive business assets, including all of its automotive technology, products and customer contracts; its facilities in Livonia and Romulus, Mich.; cathode powder manufacturing facilities in China, and A123’s equity interest in Shanghai Advanced Traction Battery Systems, A123’s joint venture with Shanghai Automotive. The pact allows JCI to license back to A123 certain technology for its grid, commercial and government businesses.
“We determined not to move forward with the previously announced Wanxiang agreement as a result of unanticipated and significant challenges to its completion,” A123 CEO David Vieau said in a release.
“We believe the asset purchase agreement with Johnson Controls, coupled with a Chapter 11 filing, is in the best interests of A123 and its stakeholders at this time,” he said.
‘Consolidation’ to be Expected, Says Brian Wynne of EDTA
“We believe that A123’s automotive capabilities are a good complement to our existing portfolio,” JCI power solutions president Alex Molinaroli says in the A123 bankruptcy announcement.
“Johnson Controls’ purchase agreement is a positive development for A123’s U.S. operations and for the long-term growth of the advanced battery industry,” Electric Drive Transportation Association president Brian Wynne said in a statement immediately following the A123 announcement.
“The electric drive industry is still in the early stages of market development,” Wynne said.
“Consolidation is an expected market force in all emerging industries, especially one as dynamic as the global electric drive market.”
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Source: A123 Systems and EDTA, Fleets & Fuels follow-up