Wanxiang still looking to buy part of A123 Systems after rebuff
Battery maker A123 Systems has had a rough year and in mid-August had agreed to let Chinese autoparts maker Wanxiang buy the company. On Tuesday, after serious political backlash, A123 backed away from that deal, filed for bankruptcy and announced that Johnson Controls would buy part of A123's assets. Today, Bloomberg News is reporting that Wanxiang is still interested in buying part of A123 Systems and that it and Johnson Controls are interested in different portions of the company's assets.
For a detailed summary of A123's troubled year and agreement with Johnson Controls see: A123 Systems veers from Wanxiang to Johnson Controls and bankruptcy
Bloomberg spoke with Ni Pin, president of Wanxiang Group Corp.’s U.S. operations who said the business assets A123 is planning to sell to Johnson Controls are separate from the assets Wanxiang is interested in.
The purchase agreement between A123 Systems and Johnson Controls is for JCI to purchase A123's "automotive business assets and certain liabilities, including all of its automotive technology, certain products and customer contracts, its facilities in Livonia and Romulus, Michigan and the Company’s equity interest in Shanghai Advanced Traction Battery Systems Co. Ltd., the Company’s joint venture with SAIC Motor Co., Ltd., for an aggregate purchase price of $116 million. Additionally, pursuant to the Asset Purchase Agreement, the Company has granted JCI the option to acquire its cathode powder manufacturing facilities in China for an additional purchase price of $9 million." (quoting from an October 16, 2012, SEC filing by A123 Systems)
The SEC filing goes on to note that because A123 Systems entered Chapter 11 bankruptcy, Wanxiang has limited recourse for enforcing the prior agreement with A123.
In the press release announcing the deal with Johnson Control, David Vieau, Chief Executive Officer of A123 is quoted saying " Since disclosing the Wanxiang agreement, we have simultaneously been evaluating contingencies, and we are pleased that Johnson Controls recognizes the inherent value of our automotive technology and automotive business assets. We are also pleased that we have received indications of interest that recognize the value of our grid and commercial businesses. We are encouraged by the significant interest we have received, as multiple parties have submitted proposals for these businesses."