[typography font="Ubuntu Condensed" size="22" size_format="px"]Electric Car Battery Maker A123 Systems Files Bankruptcy[/typography]
A123 Systems Inc. (AONE), a maker of rechargeable lithium-ion batteries for electric cars, filed for bankruptcy after failing to make a debt payment that was due yesterday.
The company listed assets of $459.8 million and debt of $376 million as of Aug. 31 in Chapter 11 documents filed today in U.S. Bankruptcy Court in Wilmington, Delaware. Chapter 11 is the section of the Bankruptcy Code used by companies to reorganize.
A123 didn’t expect to be on time with an interest payment due yesterday on $143.8 million of notes expiring in 2016, or to make a payment due yesterday on $2.76 million in outstanding 6 percent notes, the Waltham, Massachusetts-based company said yesterday in a regulatory filing.
“The company may not have sufficient cash to fund operations and may need to seek the protections provided under the U.S. Bankruptcy Code,” A123 said.
[highlight]A123, which received a $249.1 million federal grant in 2009 to build a U.S. factory[/highlight], needed a financial lifeline after struggling with costs from a recall of batteries supplied to Fisker Automotive Inc., the plug-in hybrid luxury carmaker. [highlight]A123 announced in August that it was working on a deal with Wanxiang Group Corp., China’s largest auto-parts maker, for financing in exchange for a majority ownership stake. Wanxiang plans to invest as much as $465 million in A123, giving the Hangzhou, China-based company a stake of as much as 80 percent, A123 said in an Aug. 16 statement. [/highlight]
You almost have to wonder if that was the end game; Chinese ownership. OH, but it would “keep jobs here in the U.S.!”