A123 Systems Inc., a manufacturer of electric-car batteries seeks approval from a judge to obtain a $50 million loan from Wanxiang America Corp.
On Nov. 5, the company will ask the court to approve a loan from Wanxiang, which financed the company with $22.5 million prior to it is bankruptcy filing on Oct. 16.
If approved, Wanxiang will replace Johnson Controls as its lender for the bankruptcy case. Previously, Johnson Controls agreed to lend the company $15.5 million. It has also agreed to buy the automotive business of A123 for $125 million. Johnson Controls said it ended the deal in order to avoid a fight over the loans.
A123 wants to receive offers from other bidders on or before Nov. 16. An auction is scheduled on Nov. 19 and the sale is expected to be approved at a hearing on Nov. 26.
A123 stated $459.8 million and $376 million in liabilities.
Last year, the company had revenue of $159.2 million. This year, it had a total of $39.6 million in revenue so far. The company’s net loss last year was $257 million. From January to August this year, the company suffered a total of $269 million in net losses.
A123 received more than $249 million federal grant. The company filed for bankruptcy protection, blaming short of cash and suffering from poor sales of electric cars. The Massachusetts-based company said it lost $857 million over the past few years.
The bankruptcy filing of A123 came as a surprise, considering that it reached a deal two months ago to sell a large part of the company to Chinese auto parts manufacturer, Wanxiang Group. But A123 said the deal was never done. It defaulted on a $75 million loan from Wanxiang.
- A lot of people find it almost impossible to obtain cash loans or other types of financial assistance once they damage their credit record. This assumption is both stereotypical and false. An experienced San Antonio Attorney can answer questions about the possible impact of bankruptcy filing to your credit.