Wanxiang providing DIP financing during A123 Systems bankruptcy
Beleaguered lithium-ion battery maker A123 Systems filed for bankruptcy two weeks ago, following a year-long saga of troubles. Last week a flurry of filings were made with the bankruptcy court as multiple companies jockey for position to take ownership of A123's technology and assets. Yesterday, Andy Chu posted on A123's The Pulse blog an update about their chapter 11 bankruptcy proceedings, hoping to clear up confusion regarding the debtor-in-possession financing arrangements.
The question in A123's bankruptcy is what effect will this have on various electric vehicle makers, like Fisker and GM, who depend on A123 Systems for batteries.
Two weeks ago, along with filing for chapter 11 bankruptcy, Chu explains that A123 Systems gained "access to up to $15.5 million from Johnson Controls in interim debtor-in-possession financing." That DIP financing was to tide the company over until permanent DIP financing was arranged.